Hi Carolyn,

There is no such thing as being too old for a reverse mortgage.  In fact, the older you are, the more money you qualify for.  HUD uses the age of the youngest borrower to calculate the principal limit, and older borrowers get a higher factor.  Whatever ad you saw suggesting there is an age-related danger is not accurate.

Now let me address your actual concern, because it is a good one and worth understanding clearly.

You only owe what you actually borrow

The principal limit is the maximum amount available to you - not the amount you owe.  If you and your husband qualify for $300,000 and you only draw $120,000 over the years, that is all that is owed, plus the interest that accrued on the amounts as you drew them.  You are not on the hook for the full $300,000 just because it was available.

Your heirs have no personal liability

A reverse mortgage is a non-recourse loan.  That means the lender's only security is the home itself.  When you pass, your heirs can do one of three things.  They can sell the home and use the proceeds to pay off the loan, keeping whatever equity remains.  They can refinance the balance into a new loan if they want to keep the property.  Or they can walk away and owe nothing.  If the loan balance ever exceeds the home's value, FHA insurance covers the difference.  Your heirs are never personally responsible for any shortfall.

The home belongs to you, not the lender.  You decide who inherits it and your heirs decide what to do with it.  There is no trap here.

How to think about your options

The line of credit is worth a closer look for your situation.  The unused portion grows over time, and you control how much you draw and when to draw it.  A monthly payment option also lets you pace your draws rather than taking everything at once.  Both of these approaches let you use what you need while preserving equity for your heirs if that is important to you.

Pull the amortization schedule and model a few different scenarios.  It will show you how quickly the balance grows under different draw amounts and give you a clear picture of projected equity over time.  No one can predict future interest rates or home values, but it is a solid tool for understanding how the loan performs based on how you use it.

If passing the home to your family is a priority, talk to an estate attorney about the right structure - a will, a trust, or another approach depending on your circumstances.

Reference: HUD Handbook 4000.1, Section II.B.2.ii(A)(1) - Minimum Age Requirement and Section II.B.3.d - Principal Limit (PDF pages 566, 592-594).