If you’re considering a reverse mortgage, or are already in the process of securing your loan, it’s natural to start thinking about what to do when you actually get your funds. Of course, one of the top questions you may have is, “How can I use reverse mortgage funds?”
The answer is simple—they can be used however you wish. After all, a reverse mortgage taps into your home’s equity.
While many homeowners opt to use the proceeds to consolidate debt and keep more money on hand for everyday bills and expenses, it doesn’t have to stop there. Check out these 10 ways you can leverage your reverse mortgage loan proceeds.
1. Make “Aging in Place” Modifications to Your Home
If you wish to stay in your home well into retirement years, you’re in good company. Research shows that 88% of people age 50-80 feel it’s important to stay in their homes for as long as possible1—indicative of the “aging in place” movement gaining traction with older homeowners. But the reality is that most of today’s homes are not designed to accommodate the evolving needs of older adults. Fortunately, by making some modifications around the house, you can implement impactful changes to make your home well-suited for retirement years.
From simple tasks such as installing better lighting and rearranging furniture, to more comprehensive modifications like installing ramps and stairlifts or widening doorways, there are plenty of proactive changes you can make throughout your home. Check out our Home Sweet Home blog series to find room-by-room revamp ideas.
2. Consolidate Debt
What’s the largest source of household debt in the US? You may have guessed it—mortgages. In fact, as of June 2025, home mortgage debt sat at $12.94 trillion, representing 70% of household debt.2 If you’re looking to eliminate your monthly mortgage payment, and are age 62 or older, tapping into your home equity with a reverse mortgage could be just the solution (you must, however, meet your loan obligations, like keeping current on property taxes, insurance, and maintenance). If you have an existing mortgage on your home, the loan proceeds from the reverse mortgage are first used to pay off that loan—so you can eliminate that monthly expense3 and keep more cash to use as you see fit, like consolidating other debt.
When consolidating other debt, remember to start with high-interest debt—like credit cards—first, and don’t forget to maintain your emergency or “rainy day” fund. Having this financial cushion in place is especially important when allocating more of your monthly income toward consolidating your debt.
3. Establish a Line of Credit4 for Emergencies, Occasional Expenses, or a Longer Retirement
Need some money now, but want to leave some for future expenses? Establishing a reverse mortgage line of credit can help you achieve just that—giving you access to some funds immediately at closing while leaving some available for use later in retirement. These remaining funds not taken at the time of closing continue to grow in a line of credit for future use.5 For those with higher home values, our proprietary Platinum Line of Credit reverse mortgage can potentially provide more cash and flexibility than a Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage.
With 59% of Americans reporting that they don’t have the money to cover an unexpected $1,000 expense,6 these funds could be especially beneficial in the event of large occasional expenses, emergencies, or even a delay in income.
And, since a line of credit provides access to an additional source of funds that doesn’t depend on the stock market, you can avoid making taxable withdrawals from your 401(k) or other retirement plans and instead leverage your income tax-free7 reverse mortgage proceeds, giving your portfolio some time to recover.
4. Set Aside Funds for Healthcare Expenses
When it comes to retirement, healthcare costs are a top concern among Americans, and understandably so—the price tag of future care for a healthy 65-year-old couple hovers around $388,000.8 Having a plan in place to manage these expenses well into the future is a vital component of smart financial planning. While taking advantage of Medicare services is key, you’ll likely also need some form of supplemental coverage or a prescription drug plan.
If you could use another source of cash flow to help fund healthcare expenses, funds from a reverse mortgage could be a gamechanger for your budget. By tapping into your home equity, you’ll be able to access proceeds to use as you wish, such as helping to manage healthcare expenses, setting aside funds to cover long-term care needs, or even just building up your nest egg to cover increasing insurance rates.
5. Help a Family Member with Major Expenses
College tuition, a down payment on a home, a wedding, a new car for the family—these are just a few of the many large expenses you’ve likely seen your family members face. While it’s only natural to want to step in and help them, it’s important to refrain from doing so at your own financial expense.
If you want to help your family members fund some of these significant expenses, the funds from your reverse mortgage could help you responsibly contribute to their goals and dreams. And if you own a high-value home or condo, Platinum by Longridge could help you tap into even more proceeds—up to $4 million.9
6. Defer Social Security Benefits
Perhaps one of the most important decisions you’ll face in retirement is when to start receiving those long-awaited Social Security benefits. While some look forward to start collecting as soon as they become eligible, it’s important to note the clear benefits to deferring Social Security as well.7 According to the Social Security Administration, you’ll receive 100% of your designated monthly benefits if you wait to start receiving until you’ve reached the full retirement age of 66. However, deferring just one extra year to age 67 means you’ll receive 108% of the monthly benefits. What’s more, if you wait until the maximum age of 70 to start receiving, you’ll collect 132% of the monthly benefits since you delayed them by 48 months.10
If you’re planning to defer and maximize your Social Security benefits, but could use some additional cash now, a reverse mortgage could help. By using the proceeds strategically for everyday expenses, you’ll be able to delay Social Security and maximize your benefits in the long term. Of course, it’s always a good idea to talk with your financial advisor or the applicable government agency to discuss your specific financial situation.
7. Purchase a New Home
Thinking about moving? Whether your ideal retirement home is smaller, is in a warmer climate, requires minimal maintenance, is more accessible, or is closer to loved ones, the financial challenges of making a move can often be overwhelming, especially on a fixed income.
The Reverse for Purchase financing may be able to help. This is simply a reverse mortgage where the loan proceeds help you purchase a new home—all without taking on monthly mortgage payments.11
Using proceeds from the sale of your current home or cash on hand, you make the initial down payment. From there, the balance of the purchase is covered by your reverse mortgage loan proceeds, and any remaining funds can be used however you choose. Being comfortable in your home in retirement is essential, and if you need to move to achieve this goal, a reverse mortgage can help you achieve this.
8. Spend More Time Doing the Things You Love
With retirement comes more time for the things you love—your hobbies, passions, and favorite pastimes. Whether it’s crafting, cooking, taking exercise classes, sampling local restaurants, exploring immersive technology, or even just taking the grandkids out for ice cream, we all have things we love to do. However, it’s no secret that these things often come at a cost. Tapping into your home equity can provide an avenue to fund these activities, so you can spend less time counting cash and more time doing the things you truly care about.
9. Take the Trip of a Lifetime
Like to travel? If you’ve been planning your dream vacation or exploration for years, the good news is that you finally have the time to take it. Of course, travelling—especially internationally—can come with a hefty price tag. Fortunately, funds from your reverse mortgage can help.
Whether your dream vacation is relaxing somewhere tropical and warm, taking in the rich history of foreign cities, or hopping in the car and taking a scenic road trip, your home equity loan funds can make it all possible—from airfare to lodging and dining out, and all the bills in between.
10. Splurge on Retirement Gifts to Yourself
Take a moment to appreciate all of the hard work you’ve put into getting yourself to this point—you deserve to reward yourself with responsible, thoughtful gifts to make your golden years even sweeter.
There are plenty of projects around the house that could make an excellent treat to yourself in retirement. Like to cook for the family? Consider a kitchen renovation. Want to entertain loved ones and host summer barbecues? Build the backyard of your dreams. Want to spend more time crafting? Turn that spare bedroom into your creative oasis. Investing in your fitness? Convert your basement or garage into your own personal gym space.
Or, maybe you’ve been passionate about a side hustle or hobby and want to make an investment into your craft. That could mean buying yourself some nice equipment or upgrading your tools. If you have any crafts or services you’d like to create profit off of, you could invest in setting up a website or online storefront. The possibilities are endless, and regardless of the project, a reverse mortgage could provide the funds to bring your vision to life.
And there you have it—10 ways for you to leverage your home equity loan proceeds. But keep in mind, these ideas are just the beginning. Since cash from a home equity solution can be used for whatever you wish, the possibilities are endless.
Taking the Next Step
At Longbridge Financial, we know how important your home equity is—that’s why we’re committed to making the process all about you. We will get to know your unique situation and help you determine which reverse mortgage solution is right for you—making sure it aligns with your wants and goals. Not all lenders make this commitment.
Want to learn more? See how much you may qualify for in proceeds with our free quote calculator or contact the Longbridge team today.