Describing what a reverse mortgage is and how it can be used to the uninitiated, a new article also takes things a step further by aiming to provide contextual information about the decision-making process involved in the consideration of a reverse mortgage loan. This is according to a new column published in NextAdvisor.

“While a reverse mortgage offers an easy way to tap into your home equity, it’s still a mortgage –  which means you will still have to qualify,” the article reads. “Homeowners must be 62 or older, and have a majority of the equity in their home. The property must be the homeowner’s primary residence, and can’t be used as a second home or investment property.”

Describing the loan category as a potential option for seniors facing retirement financing issues, the article also aims to give additional context surrounding the potential benefits being weighed against any other lingering concerns. A reverse mortgage causes a borrower to take on additional debt, even if that debt does not require regular payments.

“Even with the key advantages of a reverse mortgage, it isn’t necessarily the right option for everyone,” the article reads. “A reverse mortgage is a loan, which ultimately has to be paid back to the lender. When the homeowner dies, whoever inherits the property will be responsible for paying back the loan.”

Engaging with a financial professional in consultation with trusted advisors like members of a borrower’s family can be an important step to take when determining whether or not a reverse mortgage fits in with a client’s situation, the article says.

“Before sitting down to talk about a reverse mortgage, the experts recommend families meet with their financial advisor or certified public accountant to determine all options,” it reads. “If you decide to move forward with a reverse mortgage, talk to at least three mortgage lenders to see multiple scenarios and determine the best possible path.”

In the end, reverse mortgages can certainly be beneficial for the right client, but their complexity should not be underestimated, the article advises.

“Reverse mortgages can sound like an enticing offer—a way for seniors to unlock value from their homes, and gain supplemental income for living expenses, spending time with kids and grandkids, or traveling the world,” it says. “But it’s a complicated strategy that may not address every senior’s individual financial goals.”

Taking the costs of borrowing into account and working in consultation with family members or other trusted advisors, such as financial planners, can go a long way in helping a senior determine whether or not a reverse mortgage is the right path for them.

Read the article at NextAdvisor.