When I talk with seniors about the reverse mortgage, many of them say they are going to "wait" awhile.  

When I ask them WHY?, they say "What if I need the equity in later years and I have used it all up with a reverse mortgage?"

First of all, what are "later years"?  The average reverse mortgage borrower is 72 yrs. old.  That seems late enough for me.  How much longer should they live a life of sacrifice waiting for some unknown need for equity in the future?  Now seems to be a good time to start living life. Life is short.

There are many arguments to be made for not waiting to take out a reverse mortgage:  The home value may decline, the property may need repairs and this deferred maintenance could lead to bigger issues with time.  But, for me, the most important reason of all is what I call "lost life opportunity".  What if because of a lack of money they miss out on time spent with their grandchildren and loved ones, miss out on travel, eat out less often, and miss the opportunity to just plain enjoy life more? No amount of waiting will ever make up for these lost opportunities.

As for "using up" all the equity in their home, if the distribution of funds is set up correctly, there could be money left on a growing line of credit.  In fact, many of my clients use the reverse to "lock in" some equity and preserve it for future years.  That way, if home values plummet, they are guaranteed the equity in their line of credit.

Also consider that many seniors use some of their reverse mortgage proceeds to pay off existing liens (this is required) and thereby freeing up cash flow.  They could invest or save a portion of the cash for future years, if that is a concern for them.  At least, they will never have to worry about missing a house payment.  That peace of mind is priceless.

Because equity can come and go based on market conditions, who's to say that the senior will even have a substantial amount of equity in their home in the future?  Even if they did, we are back to how are they going to access it.  Most likely they will get a reverse mortgage. 

Where does this concern come from? This concern, that there may not be equity in future years "when they need it", is based, I think, on fears that they may need funds for long term care or need to sell and move into assisted living.

Let's think about this:  Even if they did not do a reverse mortgage, there isn't enough equity in the average person's home to cover very many years of paying for assisted living or other long-term care facilities anyway!  Once their funds run out, if they don't have a long-term care insurance policy, they will have to apply for Medicaid to pick up the slack.  So the equity they could have used a few years ago, to make life more enjoyable, is used up anyway! 

Why not access the equity now, set up a line of credit, pay off existing mortgages, and use some of the proceeds to purchase a long-term care insurance policy? (I realize this is not always realistic based on health and age, but a person in their 60's and perhaps early 70's, should consider this as an option).

The unused balance on a reverse mortgage line of credit grows each month and can literally double in 10 years.  Many reverse mortgage borrowers are setting these up to use for in-home care when and if they should need it.

And, there is is always the possibility of refinancing the reverse mortgage to access even more equity down the road (assuming the property has appreciated enough for it to make sense). 

While waiting sometimes make sense in certain cases, for the most part, very little will be gained by waiting.

" It is better to live richly than to die rich."