BATTLECALL GUEST EXPERT: Bernard Johnson, Loan Officer

A reverse mortgage is a loan secured by a house, but unlike a conventional mortgage that decreases over time, a reverse mortgage increases over time.

Reverse mortgages are designed for older homeowners who have a house with equity, and they want to unlock that equity and turn it into cash so they can use it for other purposes, like home repair or to pay off other debts.

With a reverse mortgage the homeowner borrows money, but does not have to repay it as long as they live in their house, so it can be used as a form of debt consolidation.

Each month interest is added to the principal amount of the loan, and when the homeowner moves, they either repay the loan, or the house is sold and the proceeds go to the reverse mortgage lender.

While a reverse mortgage may be a good idea for some people, here are five reasons a reverse mortgage may not be a good idea for debt consolidation loan purposes:

First, reverse mortgages are much more expensive than traditional mortgages, so a traditional mortgage may be a better method of debt consolidation.

Second, reverse mortgages are a form of debt; many older people want to avoid debt, particularly as they get older, so repaying debt may be a better option than debt consolidation.

Third, reverse mortgages must be paid off upon the death of the homeowner, or if the borrower has not lived in the home for 12 months. This could be an issue if the borrower is placed in a nursing home and then recovers, only to find the home sold.

Fourth, while regular Social Security and Medicare benefits are not effected, other programs such as Medicaid and Supplemental Security Income (SSI) may be affected.

Finally, there are significant up front costs, so reverse mortgage are generally only a good idea for people who intend to live in their homes for at least five years