This is a recent reverse mortgage that my company closed for a broker:

Based on age, value and rate, the borrower was able to get a Reverse Mortgage which after servicing reserve and closing costs produced about $72,000 in available proceeds after paying off a first mortgage lien of about $25,000.  In addition to the first mortgage debt, the borrower owed almost $90,000 in credit card and other debt.

The mortgage broker initially said that he would not offer the reverse mortgage to his client since it did not solve the problem by paying off all of the debt the borrower had.  He was going to spend time looking for and selling the borrower on a consolidation loan.  This would take some time due to the borrower's credit and inability to qualify for a new loan based on verifiable income.

We then discussed how much the payments were on the $25,000 first mortgage (over $400 per month for principal and interest) and how much they would save by retiring $60,000 of the $90,000 debt (the borrower wanted to be able to put the remaining $12,000 into the credit line feature for future needs).  It only took a few more minutes for the broker to realize that the reverse mortgage was the best for this borrower's situation.

Based on quick calculations the broker determined that it would only take about a year for the borrower to become debt free by applying their newly increased cash flow against the remaining $30,000.  It actually took him less time to sell the borrower on the idea.  They had read about reverse mortgages in information that AARP had sent them.

Borrowers with credit, income or debt problems are just one category of seniors that can benefit from a reverse mortgage.