As if our industry needs any more cautionary opinions about reverse mortgages, here is a recent news story that says the programs should be a last resort, not a "ticket to the resort". Such statements toward this relatively new program are still made with some frequency. Of course the writer was given their opinion, not stating a fact - everyone is entitled to their opinion. The following is mine.

If a reverse mortgage is a loan of last resort, then that must mean that it is a poor choice and seniors should stay away from it. But I say that the decision depends on what you're trying to accomplish. I think the question to ask yourself is whether or not the tradeoff is worth it to you, since the reverse mortgage allows you to use a portion of your home equity. This means you will have less equity in the future than if you did not get a reverse mortgage. You need to figure out if you will have enough left over for your purposes if you might sell your home, take the money and move. Another consideration is if it is important to you that your heirs get the maximum amount of money possible. If either of these are the case, then the reverse mortgage may not be for you.

But, using some of the equity with a reverse mortgage may be a good choice for those seniors who will stay in their homes for the foreseeable future. They may have heirs who will be just fine with the home equity that is left over - the reverse mortgage rarely allows you to use all of it anyway. Ask for a for the Amortization Table when you get a reverse mortgage quote to see how much equity will remain in the future.

Evaluating these tradeoffs may help you weigh the benefits of a reverse mortgage. The main issue to determine is if the extra cash you would get and the guarantee of no payments is worth it to you.