Senior citizens who want to stay in their home and need a stream of income may find a reverse mortgage an attractive option.  Instead of having to  pay a mortgage, a reverse mortgage pays the homeowner, either as a monthly payment, a line of credit, or a lump sum.  I t doesn't have to be paid until the homeowner sells, moves out for 12 months or dies.  Sounds terrific.

But these loans are expensive.  There's a 2-percent insurance premium on the full value of the house, no matter how much you borrow, to guarantee that you'll get the loan advances.  There are also origination fees, closing costs, interest and servicing fees that can be high.

The homeowner is still expected to pay insurance, maintenance and property taxes.  Worse yet, some borrowers have chosen to put the reverse mortgage in the name of the older spouse to increase income; when that spouse dies, the other may become homeless.

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