Reviewed by Samantha S. Peel, Mortgage Loan Officer
NMLS #2685482 · Licensed in Georgia & South Carolina · More than 12 years working with seniors and their families in senior living before joining MCS. Last reviewed September 26, 2026.
Check benefits before you touch the house
Home equity is patient money and it is finite. Benefits, insurance, and programs are the sources to exhaust first, because they do not reduce what the family has left. An elder-law attorney or a benefits counselor is usually a better first call than a lender — including us. We would rather be your fourth call than your first, if the first three save you money.
The options on the table
Every one of these is a real answer for somebody. None of them is the right answer for everybody.
Long-term care insurance
Check this first
- How it works
- A policy purchased years earlier that pays a daily or monthly benefit for qualifying care.
- Best when
- Always check whether a policy exists. Families frequently forget about policies bought decades ago, or do not realize the elimination period has been met.
- Watch out for
- Benefit triggers, elimination periods, and inflation riders vary enormously. Read the actual policy, not the memory of it.
VA Aid and Attendance
Costs nothing, pays us nothing
- How it works
- A monthly benefit above the basic VA pension for wartime veterans and surviving spouses who need help with daily activities.
- Best when
- The homeowner or a late spouse served during a qualifying wartime period. Many eligible families never apply because nobody told them it existed.
- Watch out for
- There are income and asset tests and the application takes months. Accredited VA claims agents and veterans service organizations help for free; avoid anyone charging to file.
Medicaid and elder-law planning
See an attorney, not a lender
- How it works
- State-administered coverage for long-term care for those who meet income and asset limits, with complex lookback rules on transfers.
- Best when
- Assets are limited or will be within a couple of years, and a qualified elder-law attorney can structure things properly.
- Watch out for
- This is the single biggest reason to talk to an attorney before borrowing. Reverse mortgage proceeds sitting in a bank account can count as an asset and disqualify someone from the coverage they were about to need.
FHA-insured HECM reverse mortgage
MCS may be able to help
- How it works
- A federally insured loan against home equity for homeowners generally 62 or older. No required monthly principal and interest payment while an eligible borrower lives in the home and keeps up taxes, insurance, and maintenance. The balance grows over time.
- Best when
- There is substantial equity, the homeowner intends to stay several years or longer, and monthly cash flow is the problem rather than a one-time expense.
- Watch out for
- Upfront and ongoing mortgage insurance and closing costs. The balance grows rather than shrinks, which reduces what heirs inherit. Independent HUD counseling is required. Proceeds can affect Medicaid and SSI eligibility.
HECM for a spouse staying at home
MCS may be able to help
- How it works
- One spouse moves to a care facility while the other remains in the home; the loan funds the care without forcing a sale.
- Best when
- A couple is splitting households and the at-home spouse needs the house to keep working financially.
- Watch out for
- Eligibility depends on who is on the loan and who occupies the home. Get this analyzed carefully — the rules around non-borrowing spouses have changed over the years and the details decide the outcome.
HELOC or home equity loan
Often through your own bank
- How it works
- A conventional second mortgage or revolving line, repaid with monthly payments. Underwritten on income and credit like any other loan.
- Best when
- The homeowner has reliable income to make payments, needs a smaller sum, and wants lower upfront cost than a reverse mortgage.
- Watch out for
- It requires monthly payments, which is exactly the pressure many families are trying to relieve. Lines can be frozen or reduced by the lender. Income and credit requirements are real, and fixed-income retirees are often declined.
Sell the home
Pays us nothing
- How it works
- When the homeowner is moving into a facility permanently, sell and use the proceeds directly.
- Best when
- Nobody is staying in the house. This is the cleanest and usually the cheapest source of funds, with no interest and no balance growth.
- Watch out for
- Timing and market conditions matter, and the sale can take months. A short-term bridge loan sometimes covers the gap — but borrowing long-term against a house nobody will live in rarely makes sense.
When a loan against the home is the wrong answer here
Borrowing against the home to pay for care is the wrong move more often than people expect:
- Nobody is going to live in the house. If both spouses are moving to care, a reverse mortgage is an expensive way to access money that a sale would provide outright.
- Medicaid is likely within a few years. Loan proceeds can disqualify the very coverage the family is counting on. Attorney first.
- The care need will outlast the equity. Memory care can run for years. If the equity funds eighteen months, the family faces the same decision later with fewer options.
- Benefits have not been checked. Aid and Attendance, a forgotten LTC policy, or a state waiver program may cover part of this without spending equity.
- The decision is being made this week. Care crises create pressure. Any lender willing to close fast on a reverse mortgage without counseling and a family conversation is not acting in the homeowner's interest.
Questions worth asking before anyone decides
Bring these to a family conversation, a counselor, or any lender — including us.
- Has anyone read the actual long-term care policy, if one exists?
- Did the homeowner or a late spouse serve during a qualifying wartime period?
- Have we talked to an elder-law attorney about Medicaid before moving any money?
- Is anyone going to be living in this house in two years?
- How long is this level of care likely to be needed, and does the plan cover that length?
- What is the total cost of the loan over the years we would actually hold it?
Independent places to check our work
You should never take a lender’s word as the only word. These organizations are not affiliated with Mortgage Capital Services and do not pay us or receive payment from us.
Important: This page is educational and is not financial, legal, or tax advice, a recommendation, or a commitment to lend. Loan program availability, costs, and requirements are set by lenders and investors and may change. All loans are subject to credit approval and property eligibility. Reverse mortgage borrowers remain responsible for property taxes, homeowners insurance, property maintenance, and other loan obligations. Loan proceeds may affect eligibility for Medicaid, Supplemental Security Income, and other needs-based benefits. Consult a qualified financial, tax, or legal advisor about your own circumstances. Mortgage Capital Services, LLC, NMLS #2694379 · Samantha S. Peel, NMLS #2685482 · Licensed in Georgia & South Carolina · Equal Housing Opportunity.
