You're only as strong as your weakest link ... select your partners wisely.Some of the cons of the 203k are higher interest rate, extra loan costs, and longer closing timeline (+15-30 days), but if you value the pros more, then the 203k is a great option! 

:Basically rather than using the reverse mortgage as an extra security for retirement, can you use the reverse mortgage as extra 'income' to show lenders & potentially qualify for a larger loan?

Just spend a little extra and avoid the hassle and expense of ripping up and replacing old carpet in a few years (or less if there is pet urine).

She said she is willing to pay extra to stay.

I think they can work on a small scale to make a few extra bucks but they won't make you wealthy in the long run based on my experience, who I have spoken with etc...

It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees.

This could mean an extra electric bill for you and/or cleaning.- Fire monitoring. 

What are the advantages of having one (arguably there are no costs that can't also be obtained with an umbrella liability insurance policy) versus the costs (yearly registrations, extra paperwork, startup costs, more expensive mortgage options)? 

Our primary long term goal is just to create some extra passive income, we both have careers otherwise that we do not necessarily want to quit.

Nearly every State's contract has a section for special instructions to lay out terms, add extra documentation etc.