News last week that inflation rose in June, following a previous increase in May, was likely not the development millions of Americans were hoping for. In recent years, inflation has spiked the cost of numerous items, making it more difficult to make ends meet. This has been an even greater problem for seniors, many of whom are reliant upon limited funds to pay their bills. With Social Security and retirement funds finite, then, many of these seniors may be contemplating alternative funding sources right now. A reverse mortgage may be at the top of their list.

With a reverse mortgage, homeowners age 62 and older can receive payments from their accumulated home equity. Either via a lump sum or monthly payments drawn from the home, funds here will only need to be repaid in the event of a sale of the home or if the homeowner dies. So it's naturally tempting to explore this unique funding source in the economic climate of 2025. Before getting started now, though, seniors would be well-served by preparing the answers to a series of important reverse mortgage questions. Below, we'll analyze four timely questions worth considering.

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4 reverse mortgage questions seniors should be asking themselves now

Here are four reverse mortgage questions seniors may want to start thinking about the answers to right now:

Is it the smartest way to borrow home equity right now?

There are myriad ways to borrow home equity now, ranging from reverse mortgages to home equity loans to home equity lines of credit (HELOCs). Some homeowners may even benefit from a cash-out refinance. And with interest rates on home equity loans and HELOCs much lower than personal loans and credit cards, now may be the ideal time to borrow equity that way instead of using a reverse mortgage. Start, then, by exploring all of your potential home equity borrowing options to determine if a reverse mortgage is truly the smartest way to borrow your hard-earned equity now.

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Can I adequately get by with Social Security and other funds?

Concerns over recent Social Security overpayments, clawbacks and insolvency are all pertinent right now and it's understandable if homeowners feel like they need an additional funding source, of which a reverse mortgage can easily provide. But your home is likely your most prized financial asset and borrowing from it should always be done judiciously, especially now. So, ask yourself if you can adequately get by with Social Security and your other retirement funds instead. If you can't, a reverse mortgage makes sense. But if you're just looking for an alternative income stream that you don't truly need, it may not.

What are my financial goals for my beneficiaries?

If you were planning to pass your paid-off home to your beneficiaries after your death, then a reverse mortgage can alter those plans. Since funds here will need to be repaid once the homeowner has died, there may be little or nothing left to pass on to beneficiaries, many of whom may be depending on that money in today's inflationary and high-rate climate. Re-evaluate your financial goals for your beneficiaries, then, before pursuing your reverse mortgage options. You may find that there are ways to protect a portion of your assets for your beneficiaries while still securing a new income stream for yourself simultaneously.

Which payment type makes the most sense?

If you ultimately do settle on a reverse mortgage as your optimal recourse now, then you'll need to determine how you want to get paid. With a reverse mortgage, you can receive funds in a lump sum, via monthly payments and potentially even as a revolving credit line similar to a credit card or HELOC. Which payment strategy makes the most sense for your needs and goals? This question will be specific to the homeowner in question, but it's worth contemplating the answer now so you're better prepared when it comes time to complete the formal paperwork.

The bottom line

A reverse mortgage could be the precise financial tool seniors require in today's unpredictable but still difficult financial landscape. By taking the time to think through the answers to these four questions, these seniors can better determine if this is truly the right move for their financial situation now or if they're better served by exploring alternatives or, in some instances, keeping their current financial strategy the same.