Seniors often look to a reverse mortgage for extra cash. But if you have savings, a family with whom you could live, or low-income assistance, a reverse mortgage should be your very last option.
Why? A reverse mortgage, also referred to as a "home equity conversion mortgage" (HECM), allows homeowners 62 years and older to convert their house into cash. But most don't realize a reverse mortgage may not be appropriate for their financial situation.
Seniors are required by the U.S. Department of Housing and Urban Development to take financial counseling classes if they want a reverse mortgage, says Mike Sullivan, chief education officer for Take Charge America. The agency, based in Phoenix, is one of many nonprofit credit and housing counselors contracted with the government for these sessions.