Is a Reverse Mortgage a ‘crazy-butt idea’? - Skip to content

Is a Reverse Mortgage a ‘crazy-butt idea’?


Don’t explore those options!

Reverse mortgage professionals are well familiar with Dave Ramsey’s dim view of reverse mortgages. When Dina, a caller to The Ramsey Show said she and her husband have no heirs and were considering a reverse mortgage Ramsey and his cohost reacted dramatically as if she said she was planning to light her hair on fire. 

“We don’t have any heirs. Can I do a reverse mortgage?”, said Dina. 

“What are you saying?!” replied co-host Jade Warshaw. “Where is that woman who called and said she listened to the show? What did you do with her?” Ramsey quipped. 

A recent Yahoo Finance column recounts how the call to one of America’s most popular financial talk shows played out. “Quit entertaining these crazy-butt ideas”, said Ramsey. 

Dina is a 59-year-old teacher who mere months from retirement was looking into options to finance much-needed renovations on their home stated that she and her husband were considering a HELOC or a reverse mortgage. 

Their reported combined annual household income is $158,000. Dina says she could pay off the mortgage by August with her projected savings and a $28,000 tax-sheltered annuity. 

“I’m exploring options”, Dina said. “Don’t explore those”, replied co-host Warshaw. 

Don’t explore options? Why not? Because Dave doesn’t like reverse mortgages? 

What’s unknown is how much household income they will receive after Dina retires or if her husband’s income will remain the same. What we do know is Ramsey tends to paint with broad brush strokes giving advice that may not consider the unique circumstances of each caller.

Here are some questions Dina may want to weigh on how to pay for her home renovations.


  • What are the tax consequences of cashing out the tax-sheltered annuity?

  • Would spending down savings to finance renovations leave them forced to cash out other financial accounts that could lead to penalties?

  • Having no heirs what’s the advantage of leaving a home that’s paid off?

  • How much cash flow is preserved by either paying off the mortgage balance or refinancing into a reverse mortgage?

  • Does Dave Ramsey understand that unlike a HELOC a Home Equity Conversion Mortgage’s ‘line of credit’ cannot be frozen or reduced should home values drop?

  • With an annual household income of $158,000 and unable to pay cash for repairs and renovations, what other debts make self-funding the project unrealistic? 

  • What are the opportunity costs of not considering a reverse mortgage?

  • A reverse mortgage may not be their best option, or it could provide the flexibility for Dina and her husband to further safeguard or enhance their retirement. 

    The point is if an advisor makes the blanket statement to ‘not consider other options’ the client may want to consider advice from another financial professional.


    Watch the Ramsey Show episode segment

    [Yahoo Finance] ‘Quit entertaining these crazy-butt ideas’



    Editor in Chief:
    As a prominent commentator and Editor in Chief at, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
    Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
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    1. I get tired of reading the nonsense of those like David Ramsey. We all have opinions but David has found a way to make money off of his and, of course, his audience has enriched him to a very, very substantial degree.

      But here are a few observations. David has no formal education in personal finance. Many times he is financially tied to those he recommends thus taking away from even the remotest pretense of independence except for those who lack understanding what that is and what that is saying about his advice.

      Unfortunately the groupies he has engendered overwhelm any voice of reason (or lack thereof) that questions David’s advice. All contra opinions are treated exactly the same. The highest level of financial acumen his followers have is David’s but THAT is the highest and most lack even that level of financial acumen.

      I will waste no more time on David in this blog.

    2. I understand the teachings of Dave Ramsey with it comes to financial planning, but he doesn’t have much understanding of the reverse mortgage product. Dave and his cohorts won’t even discuss the program. This is one example of his ignorance – there’s more.

      I actually like the guy but he has one fault that is noticeable. When he’s asked a question and he’s not educated on the subject, he responds with smart-ass comments. His co-horts are worse. Years ago he ran up credit cards and had to file bankruptcy. Then he made millions preaching .. “if you can’t pay cash, don’t buy it”. Great philosophy if you can afford it. Unfortunately, most can’t. Most people have to “manage” their finances.

      In this case and couple is looking at a reverse mortgage to remodel their retirement home – AND THEY HAVE NO ONE TO LEAVE THE HOME TO WHEN THEY PASS AWAY. So they ask him about using some of the equity to make the improvements, knowing they won’t have to pay the loan back. It’s a simple way of spinning down a non-liquid asset without impacting their income stream, and improving their retirement. Did he even ask a question – NO. Did he make another recommendation – NO. His answers are simply smart-ass comments. Com’on Dave, your better than that. If you don’t understand a reverse mortgage and no interest to learn …. Simply admit it, and keep your mouth shut. Be honest and tell the homeowner you’re ignorant on the subject.

      BTW, that little weeble of a mouth-piece that sit’s next to you; he makes you look stupid.

    3. Unfortunately, Dave Ramsey won’t consider all the options, flexibility and protections a reverse mortgage has to offer. He has built up a certain “schtick” that has made him popular and wealthy, but he continues to be stuck in an uneducated space as it relates to the proper, responsible use of the reverse mortgage strategy.

    4. This Caller represents the exact profile of someone who would most-benefit from the HECM Reverse Mortgage. If she opened the HECM (once she was 62 yrs old), she would have a huge line of credit by the time she was, say, 80 yrs of age. She doesn’t have to touch it until then. At that point, she’d have a significant financial backstop allowing her to weather all manner of life and financial uncertainties.

      It seems that Mr. Ramsey’s mantra is: “The goal is to die with the absolute maximum amount of home equity one can possibly obtain over their life”. I would love to ask him: “Why would she not be entitled to use her hard-earned home equity to have a better lifestyle? To travel? To pay for medical expenses? To fix up her home to allow her to ‘age in place’? To hire in-home care when the time comes? etc. etc. ”

      Perhaps Mr. Ramsey should set up a business where he sells paid financial advice in exchange for being compensated from peoples’ estates after they pass away. His faithful could leave him billions of dollars of their home equity that they never used or enjoyed – because he told them not to.

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