When I listen to the 2022 podcast by Suze Orman on reverse mortgages, I am both grateful and disheartened. Grateful, because every time a high-profile personality brings up reverse mortgages, it renews public interest in a program that truly can help many older homeowners. Disheartened, because Suze’s comments continue a long tradition of misunderstanding what the modern Home Equity Conversion Mortgage (HECM) really offers today’s retirees.
What does Suze Orman get wrong about reverse mortgages?
Suze Orman misunderstands modern FHA-insured reverse mortgages, overlooking their federally guaranteed line-of-credit growth, consumer safeguards, and security features. Her traditional debt-free philosophy ignores today’s HECM benefits that let seniors safely access home equity for financial stability and independent retirement living.
I respect Suze’s passion for financial independence, her personal story of rags-to-riches, and her commitment to helping people live debt-free. But as someone who has spent decades counseling older homeowners and teaching professionals about reverse mortgages, I believe she bases her negative view of reverse mortgages on outdated assumptions, incomplete information, and unrealistic expectations.
In addition to my insight below, I suggest reading up on reverse mortgages by connecting with articles at HUD, the CFPB, or the National Council on Aging.
So, let’s address what she said point by point to separate myth from reality.
Suze Orman on Reverse Mortgages: “The goal of your home is to own it outright.”
Owning your home free and clear feels good. It provides emotional comfort and a sense of security, possibly explaining why a record 40% of homeowners have no mortgage. But holding all your wealth in your home can lead to the classic example of living “house rich and cash poor.” Many of the seniors I counsel sit on hundreds of thousands of dollars of home equity but have less than $25,000 in savings and investments.
I really believe in building wealth through real estate. It makes up a large portion of my wife’s and my own retirement plans. I see it as a smart move for anyone who can make it. But I don’t believe refusing to use real estate wealth when it can make the difference between stress and peace in retirement is a smart move. The goal of the home should be to serve its owner not to serve as an inheritance vehicle for financially secure adult children. The HECM program exists precisely to help homeowners use the equity they’ve earned while staying in the home they love.
“We don’t know what’s going to happen in the real estate market.”
That’s absolutely correct. And that’s exactly why the FHA-insured HECM exists. With a reverse mortgage, the homeowner’s access to funds is federally guaranteed as long as they continue to live in the home and meet program obligations (which happen to be very much the same as homeowner obligations under a traditional “forward” mortgage). The lender cannot cancel or reduce the available line of credit, even if home values fall. This makes the HECM one of the few financial tools where uncertainty in the market doesn’t automatically increase your risk.
Professionals working with senior homeowners should see this as a key advantage for clients anxious about volatility. The HECM provides predictability in an unpredictable world.
Suze Orman on Reverse Mortgages: “When interest rates were low, reverse mortgages made no sense…”
This comment reveals a fundamental misunderstanding of how the HECM works. While low rates can slightly increase initial proceeds, the true power of the HECM is in its growing line of credit. The unused portion of the line increases every month at the same rate the loan balance grows It’s even adjusted upwards by 0.5% to account for the annual mortgage insurance premium. In plain terms, the longer you leave funds untouched, the more borrowing power you gain. The higher interest rates rise, the faster that line grows. Yes, it’s a complete turnaround of our beliefs surrounding mortgages and interest rates. That’s another reason it’s called a “reverse” mortgage.
When interest rates increase, the line of credit growth accelerates, creating more accessible equity even if the home’s market value stays flat. That’s a feature, not a flaw, and one of the most valuable aspects of today’s program that Suze’s statement completely overlooks.
And what happens when interest rates go down? That doesn’t mean the line of credit decreases. Interest rates are rates of acceleration, not speed. So the line of credit will continue to increase, just at a different rate of acceleration.
Suze Orman on Reverse Mortgages: “A reverse mortgage doesn’t give you security.”
Security is exactly what the FHA’s insurance provides. As long as borrowers pay their property taxes, homeowner’s insurance, and maintain the property (similar to traditional mortgage obligations), they can remain in their homes for life with no monthly mortgage payment. Even if the home’s value drops below the loan balance decades later, neither the borrower nor their heirs will ever owe more than the home is worth. That’s federally guaranteed.
For financially vulnerable seniors, that guarantee is a form of long-term security that traditional mortgages or home equity loans cannot match.
But what happens when the homeowner has to move to assisted living? I think we overestimate the percentage of seniors who will end up in a long-term nursing home facility. Most statistics I see put that percentage between 19% and 25%.
“Just live your life the way you’re meant to live it—own your home outright.”
This statement sounds nice in theory, but it ignores the financial reality of most retirees. The majority don’t enter retirement fully funded. Social Security alone rarely covers the true cost of living, especially taxes, home maintenance, and lifestyle choices.
The truth is, many seniors are not living the life they’re meant to live because their wealth is tied up in their home’s walls and roof. A HECM can turn that dormant asset into a reliable, flexible source of income or backup cash flow without giving up ownership. Homeownership should support independence, not restrict it. Oh, and BTW, with reverse mortgages, just as traditional mortgages, the homeowner’s name remains on the title. Please don’t confuse this with scams and frauds. Reverse mortgages are legit.
Suze Orman on Reverse Mortgages: “Live on the income you have from other sources.”
Again, Suze’s view of life resides in the realm of the ideal, but America’s median retirement savings tells another story. According to Federal Reserve data, the typical household aged 65–74 has less than $200,000 saved. Most will rely almost entirely on Social Security. Suze’s advice might work for the top tier of the top 1% of financially independent retirees, but the average homeowner doesn’t have millions in accessible assets.
A HECM isn’t a luxury product, although I believe even wealthy retirees should at least consider its place in their own plans. Still, HECMs are financial safety valves for middle-income seniors who want to age in place without selling investments, uprooting their lives, or becoming a burden to family. If we’re going to encourage financial dignity and independence, exclusionary advice like “just use other resources” isn’t helpful. It’s the same line of unreasoning she used when telling FIRE adherents (Financial Independence Retire Early) that they would be “stupid” to retire with anything less than $10M. Can you say “tone-deaf”?
Suze Orman on Reverse Mortgages: “Do not use your home as a checking account.”
This is another common misconception. A reverse mortgage does not turn your home into a checking account. It turns it into a resource that grows over time. You draw on it when you need it, not as a routine cash flow (although that option is available). The HECM line of credit compounds, increasing available funds month after month. No checking account does that.
Moreover, you still own your home. The lender simply has a lien, just as with any other mortgage. HECM borrowers remain on title and can sell, refinance, or pay off the loan any time they are able and so choose. But why would you choose if you don’t need to.
“Thousands of people have written to me saying they regret doing a reverse mortgage.”
Some borrowers in the early years of reverse mortgages did experience confusion or poor outcomes. Unfortunately, Suze’s comment overlooks the substantial reforms made way back in 2014. These include stronger financial assessment rules, mandatory independent counseling (which I’ve provided for years), inheritance protections for non-borrowing spouses, and safeguards against early default.
Modern HECMs are not the same products they were decades ago. The borrowers writing letters to Suze likely took their loans before these consumer protections were enacted. Quoting those experiences today is like criticizing a 2025 electric car because of problems with a 1990s diesel truck.
Suze Orman on Reverse Mortgages: “I would never advise to do one in a million years.”
Such absolute language may make for good radio, but it closes the door on nuanced conversations. Every financial decision deserves context. Reverse mortgages aren’t for everyone, but for many clients they can be a vital part of a comprehensive retirement income strategy.
Professionals from financial planners and real estate agents to attorneys and elder law attorneys should not dismiss HECMs based on outdated stereotypes. Instead, they should learn how these tools fit into the modern planning landscape. For example:
- A financial planner can integrate a growing HECM line of credit into a client’s retirement drawdown strategy, reducing sequence-of-returns risk.
- A real estate professional can help older clients downsize or relocate using HECM-for-Purchase financing instead of draining retirement accounts.
- An estate planner can guide clients in balancing legacy goals with lifetime financial comfort.
The goal isn’t to “sell” reverse mortgages. It’s to help clients make informed, empowered decisions.
What Suze Gets Right and What’s Still Missing
I’ll give Suze credit for consistency. She has always advocated living debt-free and maintaining control over your finances. That’s admirable. But financial control today doesn’t have to mean keeping wealth locked inside a house.
The modern HECM program encourages responsible borrowing backed by federal insurance and mandatory education. For the right homeowner with proper guidance from ethical professionals, a HECM reverse mortgage can be the difference between scraping by and enjoying retirement with less stress and more options.
Every professional serving senior homeowners should learn enough about reverse mortgages to recognize when they make sense and when they do not. That’s my mission as the HECM Coach: to replace fear with facts, rigid ideals with flexible strategies, and outdated messages with informed understanding.
Suze’s heart may be in the right place, but it’s time to bring the conversation into the twenty-first century.
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