• Reverse mortgages are popular with senior citizens.house image by hans slegers from Fotolia.com
  
  Reverse mortgages are financial products designed for senior citizens to access the equity in a home that is fully or mostly paid for. They can provide ready income for seniors who wish to maintain their standard of living in retirement.
  
  Some seniors make easily avoidable mistakes when considering or entering into a reverse mortgage. Among the common mistakes are falling for scams, financial misconceptions and ignoring the alternatives.
  
  

Scams

• A person interested in a reverse mortgage should make sure the company offering the product is a legitimate company and not a scam or front company. According to Mortgage Cases, a group that educates borrowers about mortgage scams, the top signs of a scammer include downplaying loan counseling, offering additional products for sale and seeking payment for information.
  
  Also, be aware that some mortgage brokers try to manipulate seniors into paying large fees for finding a mortgage company that will approve a reverse mortgage.
  
  

Misconceptions

• Some seniors believe that a reverse mortgage will give them too much income and cause a reduction in their Social Security benefits. According to House Logic, a National Association of Realtors website, proceeds from reverse mortgages are not considered income, and the money received from a reverse mortgage will not trigger income limits in calculating Social Security benefits. The site recommends that seniors read the paperwork and explore all options of a reverse mortgage.
  
  

Alternatives

• Some seniors look at reverse mortgages as their only refinancing option. Among the other alternatives, the homeowner can opt for a traditional refinancing or take out a home equity loan or line of credit.