If you want to make a major home improvement and can afford it, do it. If you are still working or otherwise have means to pay back a home equity loan needed to make a desired home improvement, it is worthy of consideration.
But if you are not able to fund a home improvement through your own resources or a loan that gets paid off, you cannot afford that home improvement. You should not do it.
A bank would love for you to take out a reverse mortgage to improve your home. The institution will either earn outsized fees for a temporary loan or gain full ownership of your newly improved house.
Assume a home value of $300,000 and a reverse mortgage rate of 5%. At age 65, using current H.U.D. (the U.S. Department of Housing and Urban Development) tables, you would be able to borrow a maximum of 54.2% of your home’s $300,000 value, or $162,600. Only 60% of this, or $97,560, could be obtained as a cash advance the first year; but if used for a home improvement you could get the other $65,040. This is clearly the purpose here, so you borrow the max.
On day one, you borrow $162,600, but the bank will need to collect closing costs. You would only have access to about $149,348.
In less than 10 years, your reverse mortgage balance will pass the $300,000 value of your home. If your improvements add value to your house dollar for dollar, your reverse mortgage balance will pass the enhanced home value only a few years later.
Put another way, you did not improve your home. You upgraded an investment property effectively owned by the bank. The bank bought your home for $149,348; minus the amount you spent to improve it. You sold it for, at most, the $97,560 figure mentioned above.
Get the whole picture. Read The Final Rip-Off: Reverse Mortgages available at Amazon and Barnes & Noble.