Reverse mortgages are a way for homeowners to turn home equity into cash. If you're over 62, you may be able to get payments (or a lump sum) from your home - as opposed to the payments you used to put into the home.
They work well in some cases. However, they're complex, and they can cause problems.
Consumerman highlights a few of them:
- Getting tangled up with a loan you don't need
- Shady salespeople
- Forcing survivors to move out of a family home
Take the time to learn about reverse mortgages before you get one. Imagine the possibilities and worst-case-scenarios. It's easier to do your homework ahead of time, and you'll have more options. Get family members involved in the process. You don't have to put their interests first, but you'll want to know if you're putting them at risk.
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