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Reverse mortgage guide
Dave Ramsey has been against reverse mortgages for years, and his view hasn't changed. Ramsey Solutions calls them "major rip-offs" and "a predatory program designed to take advantage of you." Some of his points are fair: it's a loan, the balance grows, and you can lose the home if you don't pay property taxes and insurance. Other points don't match HUD's rules for the FHA-insured HECM, such as the idea that your family will be stuck paying back more than the home is worth. Here is what he has said, what the rules say, and how to decide for yourself.
If you listen to Dave Ramsey, you already know where he stands on reverse mortgages. He doesn't like them, and he says so loudly. A lot of people I talk with have heard him, and they ask me the fair question: "Is he right?"
This page shows what Ramsey and his company, Ramsey Solutions, have said, with links to each source. Then I'll go through each claim, point by point, next to what HUD's rules actually say. Where he's right, I'll tell you.
One note first: Dave Ramsey and Ramsey Solutions aren't affiliated with ZYNG Mortgage, and they haven't reviewed or endorsed this page or any of our loans.
Unlike Suze Orman, whose view has hardened over the years, Ramsey has been steady. Here are the main places his views show up.
Most of what people quote comes from one article on the Ramsey Solutions website. It has been updated over the years. The version I'm quoting from here cites a 2023 report. Lines from it include:
The article also says you "won't owe the mortgage company a dime until you move, sell your house or die," and that reverse mortgages "flat-out stink!" Instead, it points readers toward working longer, maxing out retirement plans like a 401(k), downsizing, signing up for Medicare at 65, and waiting until 70 to claim Social Security.
In July 2021, Ramsey posted on Facebook: "THERE'S NO SUCH THING AS GOOD DEBT." HousingWire tied that post to his stance on reverse mortgages. It's the heart of his view. A reverse mortgage is debt, so he's against it.
Around the same time, and again in 2024, reverse mortgage professionals published point-by-point fact checks of the Ramsey article. You'll find them in the Sources list at the bottom of this page.
On The Ramsey Show, a 59-year-old teacher named Dina said she and her husband were weighing a HELOC or a reverse mortgage to pay for siding and a sunroom. Ramsey called the reverse mortgage a "bad idea" and told her, "Quit entertaining these crazy-butt ideas."
One detail stands out to me. At 59, Dina couldn't be a HECM borrower herself, because every HECM borrower must be at least 62. We weren't told her husband's age. If he was 62 or older, he could have been the borrower, and Dina could have been protected as an eligible non-borrowing spouse. Either way, that's a conversation to have with real numbers, not a yes or no on a radio show.
In February 2025, TheStreet quoted the Ramsey Solutions view again: reverse mortgages are "major rip-offs" and are "especially risky for seniors because they carry high interest rates." In December 2025, TheStreet and Market Realist ran fresh stories quoting the "predatory program" line.
Why it matters: Ramsey's message hasn't changed. That's useful, because it means we can look at each claim on its merits.
These rules apply to the HECM, the FHA-insured reverse mortgage that most people get. Proprietary (jumbo) reverse mortgages set their own terms, so I check each one in writing.
What they say: The article calls the line "You will never owe more than your home is worth!" "a complete lie." It gives an example: borrow $175,000 at 6% on a $300,000 home, don't pay it back for 25 years, and "you (or your family) will owe a whopping $260,000 in interest," for a total of $435,000.
What the rules say: The loan balance really can grow larger than the home's value. That part is true, and over a long enough time it's likely. What isn't true is that you or your family have to pay that difference. A HECM is a non-recourse loan. When the loan comes due and the home is sold, the sale proceeds pay off the loan, and FHA mortgage insurance covers any shortfall. You and your heirs aren't personally liable for it. If your heirs want to keep the home, they won't have to pay more than 95 percent of its appraised value, even if the balance is higher.
So their example actually shows the protection working. The balance in the example passes the home's value, and the insurance covers the gap.
A side note on the math: $260,000 is about what simple interest comes to on $175,000 at 6% over 25 years. Reverse mortgage interest compounds, so a real balance would grow faster than their example shows. I'm not going to pretend the balance doesn't grow. It does, and I'll show you exactly how much on your own numbers.
What they say: If you die before paying off the loan, "your family will have two options: Pay back the entire amount you owe, or give up your home to the bank."
What the rules say: Heirs actually have more choices than that:
They also get some time, but it isn't unlimited. Heirs get a notice and 30 days to tell the servicer what they plan to do. The servicer generally has to start foreclosure within six months of the loan coming due, unless HUD approves more time. Extensions, usually in 90-day steps, are possible when the family shows it's actively selling or getting financing. They aren't guaranteed, so the family should stay in touch with the servicer and move quickly. See Reverse Mortgages and Heirs.
What the rules say: There's no maximum home value for a HECM. HUD sets a national lending limit, but it only caps the home value used to figure how much you can access. A home worth more than the limit still qualifies. For higher-value homes, a jumbo reverse mortgage may provide more. See Lending Limits.
What the rules say: FHA mortgage insurance does protect the lender, but it also protects you and your heirs. It's what pays for the non-recourse protection above. It also lets HUD keep making your loan advances if a lender ever can't. That's why adjustable-rate HECMs have a second note in HUD's favor. See Why Reverse Mortgages Have 2 Notes and 2 Deeds of Trust. The insurance does add real cost, and you can see it on Reverse Mortgage Costs.
What they say: The article quotes a 2023 report from the National Consumer Law Center (NCLC) with that line.
What the rules say: I take that report seriously. NCLC's concerns centered on servicing: how servicers communicate with borrowers, and how hard it can be to get a payment plan approved when someone falls behind on taxes or insurance. Those are real problems, and they're one more reason to work with someone who stays involved after closing.
HUD saw the same pattern years earlier. When it created the financial assessment, HUD said "an increasing number of tax and hazard insurance defaults" led to the change. Since April 27, 2015, lenders must review your income, credit, and history of paying property charges before approving a HECM. If it looks like you might struggle, part of the loan can be set aside to pay your taxes and insurance for you. See Reverse Mortgage Financial Assessment.
That lowers the risk. It doesn't remove it. If a borrower stops paying taxes or insurance and there's no set-aside to cover them, the loan can still go into default.
One more thing worth knowing when you hear about reverse mortgage foreclosures: they aren't all the same. Many happen after the last borrower has died and nobody lives in the home anymore. If the heirs don't sell, pay off the loan, or sign the home over, the servicer may use foreclosure as the legal way to close out the loan. That's a paperwork process on an empty house. It's very different from foreclosing on a living borrower who fell behind on property taxes. Both get called "foreclosure," so be careful with any count that lumps them together.
What they say: The article warns that if you "have to move to a nursing home or assisted living facility and can't afford to make payments on your reverse mortgage," you'll lose your home, and says "You'll start owing payments on a reverse mortgage if you move."
What the rules say: Moving out doesn't start monthly payments. If the last borrower is away from the home for more than 12 months in a row because of physical or mental illness, the loan becomes due. It's then repaid in full, usually by selling the home, with any equity left going to you or your estate. If you have a co-borrower still living in the home, the loan doesn't come due. An eligible non-borrowing spouse may also be able to stay if they meet HUD's conditions. See Non-Borrowing Spouse.
Is moving into care a real risk to plan for? Absolutely. But the risk is that the home will likely be sold, not that you'll get a bill you can't pay. Some families use a reverse mortgage line of credit to pay for care at home so they can avoid that move. See paying for in-home care.
What the rules say: That's partly right. Interest and mortgage insurance build on everything you owe: the money you've drawn plus any closing costs and upfront mortgage insurance you financed into the loan. Those financed costs start accruing at closing. What doesn't build interest is the unused part of a line of credit. If you have a line and don't touch it, you aren't paying interest on that money.
You also don't have to take everything at once. Since 2013, HUD has generally limited how much you can take in the first year. With a line of credit, you draw only what you need. See Reverse Mortgage Costs.
What the rules say: This is one of the most common reasons people get a HECM, and the program requires it anyway. Any existing mortgage on the home has to be paid off at closing. For many people, getting rid of that monthly mortgage payment is the whole point. There are no required monthly mortgage payments with a HECM. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Whether it makes sense depends on the numbers. If you'd have to use most of your available money just to pay off the old loan, I'll tell you that, and we can look at other choices too.
What they say: The article lists the origination fee, mortgage insurance, closing costs, and servicing fees, and says "we're talking close to $10,000."
What the rules say: The upfront costs are real, and I won't pretend otherwise. They vary a lot with your home's value, the lender, and whether lender credits are available, so a single number doesn't tell you much. One cost on their list we don't charge: ZYNG chooses not to charge a monthly servicing fee on our HECMs. See Reverse Mortgage Costs for how each fee works, and ask for a written quote before you decide.
What the rules say: Proprietary (jumbo) reverse mortgages aren't insured by FHA, so HUD's HECM rules don't apply to them. But they aren't unregulated. Lenders still have to follow federal lending laws, including the Truth in Lending Act rules written specifically for reverse mortgages, along with state laws. Their rates can be higher than a HECM's, which is one reason I compare both side by side. See Jumbo Reverse Mortgages.
What the rules say: This line comes from TheStreet's 2025 coverage of Ramsey's view. Reverse mortgage rates move with the market, like any loan. Don't take my word or his. You can see today's reverse mortgage rates and compare them yourself. What's fair to say is that interest is added to your balance instead of paid monthly, so it compounds. That's a real cost, and I'll show you exactly how it adds up over time.
What the rules say: The HECM has consumer protections most loans don't. You must meet with an independent, HUD-approved counselor before you apply. The lender must review whether you can afford the home. Eligible spouses are protected. And the non-recourse feature limits what you and your heirs can owe.
That said, I won't pretend nobody has ever been sold a reverse mortgage they didn't understand. It has happened. The answer is to slow down, ask questions, bring your family, and work with someone who explains every number. See Reverse Mortgage Counseling.
He makes some points I agree with, and I make them myself:
Ramsey's plan works beautifully if you've followed it for decades: no debt, a paid-off home, and plenty saved. Many people reach their 60s and 70s without that. Their biggest asset is the house.
For them, the real choice is usually between a reverse mortgage, selling, or cutting back hard. Selling has costs too. The Ramsey article's downsizing example sells a $350,000 home with $250,000 in equity, buys a $225,000 home, and keeps $25,000. That's before agent commissions, closing costs on both homes, and the cost of moving, which can eat up most or all of that $25,000. For someone who wants to stay put and can afford the upkeep, a reverse mortgage can be the better option.
Here's the one that surprises people. Ramsey says to wait until 70 to claim Social Security, and I agree. But most people claim early because they need the income now. Some use a HECM line of credit to cover those years instead, so they can wait for the bigger check that lasts the rest of their life. It has real costs and isn't right for everyone, but it's a case where a reverse mortgage can help someone follow Ramsey's own advice. See The Reverse Mortgage Bridge to a Bigger Social Security Check.
For others, it's a planning tool, not a rescue. A HECM line of credit can sit ready for emergencies, a market drop, or care at home later. Read the standby line of credit strategy, paying for in-home care, and HECM vs. HELOC.
If your values say no debt, ever, I respect that. A reverse mortgage is optional. The goal is that you decide based on how the loan really works.
Ask yourself these questions:
Then look at real numbers. Get your estimate, read the pros and cons, or call us at 530-888-6000. I'm happy to go through it with you and your family, and to tell you if I think you shouldn't do it.
Ramsey Solutions calls them "major rip-offs" and "a predatory program designed to take advantage of you." Ramsey's view is that all debt is bad, so he recommends working longer, saving more, downsizing, and waiting until 70 to claim Social Security instead.
Partly. He's right that it's a loan, that the balance grows, and that you must keep up with taxes, insurance, and upkeep. Several of his specific claims don't match HUD's rules for the HECM, like the idea that your family will have to pay back more than the home is worth.
Not on a HECM. If the home is worth less than the balance, heirs aren't personally liable for the difference. If they want to keep the home, they won't have to pay more than 95 percent of its appraised value. If there's equity left, it's theirs. See Will my family lose their inheritance?
Yes, if you don't meet the loan terms, such as paying property taxes and homeowners insurance, keeping up the home, and living there as your primary residence. That's true of most mortgages too. The financial assessment is meant to catch problems before the loan closes, but it can't remove the risk entirely.
The HECM is an FHA-insured program with required counseling and federal rules. Scams do exist around reverse mortgages, though, like pressure to buy other products or to hand over money. Never let anyone rush you, and never sign something you don't understand.
She's also against them today. She was more open around 2009, and by 2022 she said she would never advise one. See What Suze Orman Says About Reverse Mortgages.
Ramsey and news coverage
Industry fact checks
Rules and reports
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
