You may have come across the term reverse mortgage at some point and probably wondered what it meant. A reverse mortgage is a popular means of getting funds for senior citizens who have completed 62 years of age or more and who are looking for an alternative to traditional loans or other sources of borrowing.

If you are done planning on taking a reverse mortgage, you must remember to get your facts right as you do not want a crucial financial decision such as this to be a huge mistake. To help you make up your mind, here are some of the basics of a reverse mortgage for you to note.

• Counseling is a must for a reverse mortgage
  A reverse mortgage should not be taken just because the option is available. It is important to seek financial counseling to know whether it will prove to be the right solution for your needs. If you already have many loans and debts, a reverse mortgage can push you deeper into financial problems. A counselor will be able to tell you if a reverse mortgage is good for you or not based on your credit history.
• Report scams if you come across them
  Never trust anyone who calls you and offers to help you with taking a reverse mortgage. Please do be aware of people who can use pressure tactics to sell a reverse mortgage scheme. If you feel you are being duped or cheated, you can complain to the Department of Housing and Urban Development at their given helpline number. You can also file a complaint so that others are made aware of the possibility of such scams.
• A reverse mortgage is not a financial crisis tool
  When understanding the basics of a reverse mortgage, it is important to note that this kind of loan needs to be planned and then executed. You should not take up a reverse mortgage at the last minute just because the first few loan options have failed. It is known that people who take a reverse mortgage under pressure are usually the ones who make a default on it; they can even end up losing their home in a bad situation.
• You retain ownership of your home
  There are a lot of misconceptions that people have when it comes to the basics of a reverse mortgage. When they get to know that the owner of the house gets monthly installments or a lump sum of money, their understanding is that they give up ownership of the house. However, this is not true at all, as the financial institution does not take ownership of the house. In fact, anyone who gets approved for a reverse mortgage will still remain the owner of the house, and their name will be on the house papers.
• You can usually use the money for whatever you wish
  The best part about taking a reverse mortgage is that you can mostly use the funds for any reason you as find fit. There is only a restriction on the type of expenses you can make if you take a single-purpose reverse mortgage. In this case, the reverse mortgage is given for a particular use only. The ideal step would be to speak to your financial advisor on the best way for you to make use of these funds once you get approved.