Why a Reverse Mortgage Is Almost Never a Good Idea

Why a Reverse Mortgage Is Almost Never a Good Idea
A reverse mortgage is a loan option for homeowners to dip into their home equity. William Potter/ShutterStock
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For seniors struggling with expenses, a reverse mortgage may appear to be a practical option. Though such a lifeline seems appealing, a closer look may say otherwise. The industry is rife with scams; fees are high and often hidden. In addition, reverse mortgages may have variable interest rates, so you may wind up owing more over time.

Taking out a reverse mortgage is a significant financial decision, and understanding the pros and cons is essential.

What Is a Reverse Mortgage?

A reverse mortgage is a lending option that allows homeowners to tap into home equity to free up cash for living expenses, medical expenses, or other needs.