A reverse mortgage or home equity conversion mortgage (HECM) is a type of home loan that requires no monthly mortgage payments for older homeowners who are at least 62 years old and owns home ($100K+ home value with 50%+ equity), although borrowers are still responsible for property taxes and homeowner’s insurance. Since it allows retirees with limited, fixed income can tap the equity in their home, but do not have to repay any of the loan for as long as they stay in the home, it has become an option for some retirees who are cash strapped.  Proceeds can be used to pay off debt or settle unexpected expenses. However, retirees should understand that it has some pitfalls. Those pitfalls include:

• If you live a long time, you may eventually use up all the funds available to you from the reverse mortgage. So, if you sell the house, chances are that all or most of the money will be owed to the reverse mortgage lender.
• Fees and other closing costs can be high. Not a good option, especially if you can’t maintain the costs associated with the home.
• It would be more difficult to keep the house property in the family (esp. your heir). If you die or the home isn’t the primary residence for more than 12 months, the loan comes due, which means either you or the estate has the option to repay the loan or put the home up for sale to settle it.

Some of the reverse mortgage lenders are: American Advisory Group (visit https://www.americanadvisorsgroup.com/ca.php?pid=488&utm_medium=affiliate&utm_source=consumersadvocate&utm_term=&utm_campaign=review-site); Lendingtree (https://offers.lendingtree.com/pages/reverse-mortgage-2/product.aspx?cchannel=bd&esourceid=6245236&csource=31&cproduct=reverse&cname=consumersadvocate&cterm=53235053&cmethod=reverse&800num=hide&siteid=reverse+mortgage); Homepoint Financial (http://www.homepointfinancial.com/page/reverse-mortgages) ; LiveWell Financial; and RMF.