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Because the fees associated with a reverse mortgage are high, such loans make sense only for borrowers who expect to live in their home for a number of years.

A reverse mortgage is available to anyone who is at least 62 years old and owns a home outright, or has a small mortgage balance remaining.

It is almost always a bad idea to use a reverse mortgage to pay for a vacation or to buy a risky investment, like stocks or deferred annuities.

If you can't afford the upkeep of your home, it makes no sense to do a reverse mortgage. You will just end up having to sell eventually when you realize you can't afford the home, and whether you have any equity left after the sale depends on the size of the reverse loan that must be settled.

Unlike other loans, a reverse mortgage doesn't have to be repaid until the borrower moves out of the home or passes away.

As the United States has become an older nation, reverse mortgages have grown into a $20-billion-a-year industry, with elderly homeowners taking out more than 132,000 such loans in 2007, an increase of more than 270 percent from two years earlier.

If you pay off your mortgage before retirement, you take a huge financial load off your shoulders. You also become eligible to take out a reverse mortgage once you turn 62.

While a reverse mortgage can indeed be a viable way to generate income, it is very important to understand that after you take out a reverse mortgage, you will still be responsible for paying the property tax, the insurance premium, and all the maintenance costs for your home.

In surveys, many borrowers say reverse mortgages have improved their lives and provided money they needed for retirement.

Because reverse mortgages do not require borrowers to make immediate repayments, the interest charges are added to the debt every day, and the total amount owed grows over time.