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Seniors over the age of sixty two may use their home's equity to finance or refinance their home using a reverse mortgage. Most do this to solve some money related issue.

Many people don't have much of a choice. They have to go forward with the reverse mortgage. For others it takes some evaluating.

Those refinancing with the reverse mortgage can use funds in any manner they deem necessary. I find most are getting themselves out of their current mortgage to free up money. Others want to pay off debt or to supplement income.

Reverse mortgage numbers set a record every year. It shouldn't come as any surprise with the ever-rising cost of living. Borrowers have the opportunity to get out of their problem and still keep their name on title.

On top of that interest rates charged for the reverse mortgages are very competitive with their conventional mortgage counterparts.

As long as the program is explained properly the reverse mortgage is a very strong financial option. However, it is not without fault.

When comparing closing costs of forward and reverse mortgages you'll find reverse closing costs to be much higher.

You gotta wonder why this is the case.

The first being that costs are based upon the value of the home rather than the loan amount. The other is FHA charges 2% of the value for mortgage insurance.

It doesn't take much to see how these fees can total to a lofty number.

The reverse mortgage is a great mortgage except for the costs. As such one must be thoughtful before going forward with this.

Fortunately, when taking a loan application the lender will give you TALC disclosure which covers the annualized cost of getting this mortgage.

The document will show annualized costs over various years in the future.

You will notice the further you get away from closing the cheaper the loan actually becomes.

This disclosure helps you determine, using the real facts, if you should proceed with this type of mortgage.