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Reverse mortgage guide
Suze Orman has warned about reverse mortgages for well over a decade, and her tone has grown stronger over time. Around 2009 she called them a viable option for retirees who need more income, and by 2011 she called them a potentially dangerous step to save as a last-resort emergency fund. By 2022 she said she would never advise one. Many of her warnings still make sense, but several of the rules she described in 2011 have changed since then. Here is what she has said, when she said it, and how I'd weigh it.
Suze Orman is one of the best-known personal finance voices in the country, and she's been talking about reverse mortgages for a long time. If you've heard her warn against them, you're not alone. Many of the people I talk with bring her up in our first conversation.
This page lays out what she has said, year by year, with links to each source. Then I'll tell you honestly where I think she's right, where the rules have changed since she first said it, and how to use her advice when you make your own decision.
One note first: Suze Orman isn't affiliated with ZYNG Mortgage, and she hasn't reviewed or endorsed this page or any of our loans.
On her CNBC show, a caller said his 85-year-old father had been selling stocks for years to cover big expenses, including upkeep on his home. HousingWire first reported the call in October 2008. The father wanted to leave both the home and his investments to his two children, and the caller asked whether it was better to keep selling stocks or borrow against the house.
I wrote about her answer on MLS Reverse Mortgage on June 10, 2011. As I reported it, Orman said the father would be better off with a reverse mortgage than continuing to sell stocks. Her reasons, as I summarized them: stocks had a better chance to recover their value for his heirs, rates were low, and recent rule changes had lowered fees.
Why it matters: It shows she has looked at reverse mortgages case by case. For an older borrower with a clear need and other assets worth protecting, she didn't rule one out.
In an advice column for O, The Oprah Magazine, Orman answered a reader asking how to help aging parents. The column is undated online, but it references a 2009 book. She wrote that a reverse mortgage is "a viable option for retirees who need more income," and described the ways to take the money: a lump sum, monthly payments, or flexible draws.
She also gave three warnings that she would repeat for years:
She told the reader she wasn't sure a reverse mortgage was the best move for those particular parents. She suggested first checking whether the monthly payout would actually cover their expenses.
Why it matters: Along with the 2008 call, this is the most open she has been about reverse mortgages in anything I could find. Her position here is "it can work, if the numbers work."
In March 2011, CNBC published a column by Orman called "Reverse Mortgages: Know the Risks and Rewards," an excerpt from her book The Money Class. It's the most detailed thing she has written on the subject. Her main points:
She also described the rules as they stood in 2011: high upfront costs on the HECM Standard, the newer HECM Saver with lower fees but less money, and annual mortgage insurance on both. She explained the non-recourse feature, which means that when the home is sold, the borrower doesn't owe more than it sells for.
She also wrote that heirs who wanted to keep the home had to repay the full loan balance, even if it was more than the home was worth. That's not how it works under HUD's rules today. When the loan comes due, heirs who want to keep the home won't have to pay more than 95 percent of its current appraised value, even if the balance is higher. FHA mortgage insurance covers the rest. See Reverse Mortgages and Heirs.
Why it matters: Her advice here is balanced. She warns hard, but she leaves the door open for later in retirement, with your eyes open.
In July 2011, another viewer asked whether she and her retired husband should get a reverse mortgage. They owned their home free and clear and had no pressing need for the money. HousingWire reported that Orman told them not to do it "just because he wants it," pointing to the cost and the interest that builds up until they leave the home.
Why it matters: This is a fair point I make myself. If you don't have a reason for the money, you're paying costs for nothing.
On her Women & Money podcast, in an episode called "You Earned It, Don't Lose It," Orman told the story of Carol, a 71-year-old widow. Carol had been talked into a reverse mortgage by a salesperson after her husband died.
Carol didn't understand that the loan would first pay off her existing mortgage, which had about $53,000 left on it. After that, she was told she could access only about $8,000 a year, and when she needed more, she couldn't get it. Orman said "the person never explained to her what she was getting into," and that "if she simply had sold the house to begin with," they could have figured it out from there.
One thing worth clearing up, because people often assume otherwise: Carol still owns her home. With a reverse mortgage, you keep the title. The lender doesn't take the house. It holds a lien, like any mortgage, and the loan gets repaid when the home is sold or the last borrower leaves. Carol's problem wasn't losing the house. It was that most of her equity had already gone to pay off the old mortgage, so there was little left to use.
The episode aired again in September 2021, and HousingWire wrote about it. Orman's lesson: "It is better to do nothing than something you do not understand."
Why it matters: HECM borrowers have had to go through HUD-approved counseling since the program began, and Carol's story shows that counseling alone isn't enough. Our philosophy is that our clients shouldn't learn anything new during their counseling session. By the time you sit down with the counselor, you should already know where every dollar goes, including any mortgage being paid off. How a loan is explained matters as much as the loan itself.
In 2022, Orman's retirement advice included a warning against taking a reverse mortgage at 62, as reported by Moneywise. She called it risky and said to treat it as a last resort and wait as long as possible. Her worry: "If you tap all your home equity through a reverse at 62," you may later have to sell the home if you can't afford it.
Why it matters: Her concern is spending your equity too early. That's a real risk if someone takes all the money at once and spends it.
On a September 2022 Ask Suze & KT Anything episode, a listener asked whether her brother-in-law should take out a reverse mortgage. Orman's answer was the strongest she has given:
She noted that higher interest rates had changed the math somewhat, but said a reverse mortgage still doesn't give you security. Her biggest worry was people who go to sell and find "they have no equity in it because they've been using it up."
Two things she said in this episode don't match how a HECM works:
Why it matters: Even with those two points corrected, this is the clearest statement of her opposition I could find, and her 2024 advice below points the same way. It's a long way from "a viable option" in 2009.
In 2024, a 67-year-old listener asked about using a reverse mortgage to help pay for her daughter's wedding, as Benzinga reported. Orman and her co-host KT told her not to borrow for it at all. Orman warned "this will backfire on both of you big time."
Why it matters: I agree with her completely here. I'd give the same advice.
I'll be direct. Much of what she says lines up with how I've always worked.
Her most detailed advice is from 2011. A lot has changed in the HECM program since then, much of it in direct response to the problems she described. One thing that hasn't changed: HUD-approved counseling with an independent counselor was required before 2011, and it still is. See Reverse Mortgage Counseling. You can see the full timeline on HECM Program Changes by Year.
Orman's rule of thumb is to own your home outright and never borrow against it in retirement. For many people, that's great advice. But it assumes you have enough income and savings to cover everything else for the rest of your life.
For people who don't, the choice usually isn't between a reverse mortgage and nothing. It's between a reverse mortgage, selling the home, or cutting back hard. Sometimes selling is the right answer, and I'll say so. Sometimes staying put with a reverse mortgage is better.
And for some people, a reverse mortgage isn't a rescue at all. It's a planning tool. A HECM line of credit set up early, and left mostly untouched, can sit ready for emergencies, a market drop, or care at home later. Read the standby line of credit strategy and the Social Security bridge strategy to see how that works.
Remember the caller with the 85-year-old father? That's the kind of situation where, as I reported it, even Suze Orman saw a reverse mortgage as the better choice.
Use her warnings as a checklist. If you can answer these honestly, you'll make a good decision either way:
If you want to talk it through, I'm glad to go through these questions with you and your family. You can also compare the pros and cons or get your estimate.
Not in her recent advice. In 2022 she said she has "never been a fan" and would never advise one. Earlier she was more open. In 2008, as I reported it, she told one caller a reverse mortgage made more sense for his 85-year-old father than selling stocks. Around 2009 she called it "a viable option for retirees who need more income," and in 2011 she said it could be worth considering later in retirement, "with your eyes open."
Her main concerns are that people use them to stay in homes they can't afford, that they don't understand the loan, that costs are high, and that equity gets used up, leaving little for later or for heirs.
On a lot of points, yes, and I've listed them above. Some of the rules she described in 2011 have changed since then, and her 2011 description of what heirs must pay to keep the home doesn't match HUD's rules today. Whether a reverse mortgage is right for you depends on your income, your home, your plans, and your family.
She generally recommends paying off your mortgage, owning your home outright, living on savings, Social Security, and pensions, and selling the home if you can't afford it.
He's against them too, and more bluntly. See What Dave Ramsey Says About Reverse Mortgages.
HUD rules referenced
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).
