Reverse mortgages are a great option for a very small number of people. Sometimes billed as an investment strategy, reverse mortgages are more properly referred to as an option of last resort.

When are reverse mortgages a bad idea? Seniors who can live comfortably on their income should not cash in on their home equity to invest in more aggressive investments, such as annuities or money market funds. These more aggressive investments may yield a higher rate of return than the real estate market, which can be slow to rebound. However, there is a dangerous risk that the investment will not pay off. If so, the consequences can be disastrous.

When are reverse mortgages a good idea? Seniors who need help making ends meet and wish to age in place may find a reverse mortgage helps them accomplish their goal of staying in their home. However, borrower should beware that fees and interest are usually assessed each year, regardless of whether the borrower has drawn on the equity line. Unless your home is appreciating at an extraordinary rate, it often doesn’t take long to reach the withdrawal limit.

Don’t lose your home to bad advice. Before you access the money that is tied up in your house, speak to an independent, trusted, knowledgeable advisor about the risks and costs involved in a reverse mortgage.