Like any other finance-related industry, the reverse mortgage industry is quite deep in context and reach. Reverse mortgage loans are not for everyone, as the loans have strict qualification criteria made by the Federal Government. The senior home-owning American citizen needs to be at least 62 years of age while applying for a reverse mortgage on his or her property.
The hidden elements behind reverse mortgage loans are not clearly obvious to those seeking this product for the first time. There are reverse mortgage closing costs and origination fees that need to be paid to the reverse mortgage lender for every approved reverse mortgage. This amount can be deducted in the amount that can be received from reverse mortgage, so there are no 'out-of-pocket' expenses for the home owner-cum-borrower (kind of like that set up with condo insurance).
Also, when a reverse mortgage is made out on a piece of property, while the owner continues to have the title to the property, once the owner passes away, the heirs need to repay the reverse mortgage loan, in order to keep the property for themselves. If that is not possible, then the reverse mortgage lender can lawfully take over the property and sell it in order to realize money at the then prevailing market rates, and any money above the actual amount of reverse mortgage loan taken is then paid back to the heirs or estates. (Laws regarding Canadian properties such as Mississauga Condos can differ slightly)
So, before taking a reverse mortgage, the senior needs to be sure that, the property is not going to be needed by his or her heirs, and that they have their own sources of income and they have stable jobs at least to count upon. If the children are not having independent financial background and have to rely on the property for a place to live, then taking a reverse mortgage is not a good idea, as any financial advisor or consultant would advise.