Are you a senior aged 62 or older thinking about a reverse mortgage? You're not the only one. Now that the baby boomers are entering their 60's, reverse mortgages are expected to become quite popular. So, you're wondering what are some pro's and con's of reverse mortgages?

Covering the cons is Thomas Kostigen. "Here's where the red flags are: appraisal fees, origination fees, annual insurance premiums and closing costs, which can total $10,000 or more on a loan of just $200,000. Then there's the fact that a lump sum payout could affect any other government subsidies an elderly person receives." (more)

Of course, not everyone is quite so negative on reverse mortgages. Jennifer Openshaw
states, "Because you make no monthly payments, the amount you owe grows larger over time. As your debt grows larger, the amount of cash you would have left after selling and paying off the loan generally grows smaller. The good news is that you can never owe more than your home's value at the time the loan is repaid." (more)

Reverse mortgages, one might say, are much like comfort food. Being able to stay in your own home and have extra money to supplement you lack of savings, pension, and/or social security can be very comfortable. Still, financially, you almost certainly do better selling your home, buying something smaller and using the savings as your new nest egg.

Before you apply for a reverse mortgage make sure you talk to your financial advisor or tax preparer.

Do you want to get rid of your private mortgage insurance (PMI)?

PMI is usually added to the mortgages of those who put less than 20 percent down when their purchase their home. So, if you did put 20 percent down, you shouldn't have PMI in your mortgage. If you do, ask for it to be removed immediately.

If you have owned your house for more than 2 years and you think you have now paid down 20% of the cost of your home, you can also ask to have your PMI removed, although new laws should make this happen automatically in most circumstances.

If you haven't paid down 20%, but the value of your home has gone up significantly, then getting an appraisal might demonstrate that you qualify for ending your private mortgage insurance. Click here for more information.

While refinancing has increased, as those on adjustable rate loans convert to fixed-loans, new home sales continue their decline. Overall, mortgage applications are down for the fourth week in a row and have now reached their lowest point since May, 2002 (more).

Once again; however, this shouldn't be taken as proof that the U.S. housing market has collapsed. Winter is always a slow time for real estate. The next couple of months, on the other hand, will help determine the real strength of the U.S. real estate market.