Reverse Mortgages were pretty much created as a way for senior citizens to keep their home ownership while getting paid for the equity in the home in monthly payments.  They keep ownership of the property until they pass away, and then the loaner gets their money when the property is sold.  While this reverse mortgage thing may work well in certain specific situations, it is not a decision that should be taken lightly. 

Reverse Mortgages are not really set up for the average retiree.  Generally speaking, if you have solid equity in your home, and you have a solid retirement income already, then reverse mortgages are not really for you.  Why?

Reverse mortgages are not very money friendly from the angle of financing.  The rates are not in your favor, and when you figure out the equity you have versus the money they offer, it does not look very good.  The reason for this is because the loaner has to risk much more over much longer of a time period.  That is, they do not get a dime for however long you survive.  For this reason, they have to figure that into your reverse mortgage numbers.

Another reason reverse mortgages are not always a good options is because you will not be able to leave the home behind for heirs.  Your kids or grandkids can not keep the family home and must sell it when you pass away.  For traditional people, this is catching point.

Trying to figure out the reverse mortgages can be very confusing and their are plenty of opportunistic characters out there looking to take advantage.  For this reason, you should be very mindful of any company that you do business with.  Make sure that they explain everything in detail, and it would not hurt to run the final paperwork through your lawyer to ensure your interests are covered.

To decide if a reverse mortgage will help you, ask yourself some questions:

Do I have family history to concern myself with by letting my home go when I die?  Will my kids be taken care of?

Do I have enough money to last my retirement, and if not, will the amount from the reverse mortgage be enough to be worth it?

Do I have other more attractive options such as personal loans, regular mortgages, or better interest rate loans?

Is the loss of my home worth the money?  Once the money from a reverse mortgage is gone, it is gone, after all.

What if I have an emergency and need to a second mortgage?  This is not possible with reverse mortgages though they sometimes will renegotiate the loan.

Reverse mortgages are a wonderful resource to someone that is needing the funds, and have no other way to acquire them.  For some seniors that have no other resource but the equity in their home, a reverse mortgage makes sense.

The key is to ask yourself the important questions, investigate any reverse mortgage offers carefully, and spend plenty of time considering it before diving in.  If you do these things and all answers still point towards a reverse mortgage, then you probably should look into it.