LAMAR, Miss. -- What's promoted as an easy way to get cash out of your home, may not be as simple as you think.
The On Your Side Investigators have a warning about reverse mortgages.
It's hard to miss the pitches. Older celebrities like Henry Winkler and Fred Thompson are often featured in commercials about reverse mortgages.
"It's cash you can use to pay off your credit card bills, medical expenses, actually anything," said Winkler in one commercial WREG found on YouTube.
Joann Miller says it's what convinced her to check into a reverse mortgage.
"The TV commercial says, you know, it's fast, it's easy."
The 65-year-old wanted the extra cash to pay off her car and some other debts.
"We thought that was the easiest way to go," said Miller.
Sapna Raj is an attorney with Memphis Area Legal Services. She explained how reverse mortgages work.
"It's basically an equity loan, what you can do is you can take that equity out of your house, you never have to pay a mortgage, you can get that money to spend on whatever you want," Raj said.
With a regular mortgage, you pay the lender every month, with a reverse mortgage, the lender pays you.
Seniors who are 62 and older are eligible. They still own their home and don't have to repay the money as long as they live in it.
The loan isn't due until the person dies and the home is sold.
Raj says while reverse mortgages can be good for some consumers, like any financial product, there's a catch.
"I don't think that for people who are, with a limited income, I don't think it's a good option for them."
Warning #1 - High interest and fees
Like any loan product, there are fees associated with reverse mortgages. Processing fees often must be paid up front.
Raj said, "You have to be very careful how much the fees are because it usually eats up most of the equity and the banks usually charge you a very high interest rate."
Warning #2 - It doesn't account for the unexpected
The financial advantage of a reverse mortgage is not having to pay the bank every month as long as you live in the house. Of course, many seniors run into health problems that could prevent this.
"So if you move out of your house say you move into an assisted living facility and that's a year or more, then the loan comes due right away," Raj said.
There are new rules in place that don't penalize a surviving spouse if the other dies and the loan was taken out in their name.
Warning #3 - When you pass away, your property won't go to your heirs
Raj said, "The heirs are going to have to buy that property back."
Another financial consideration is that homeowners must still pay property taxes and homeowner's insurance.
Miller ended up not being eligible for a reverse mortgage.
She was able to get her upfront fees refunded.
Raj encourages those interested in the product to do their homework.
"They need to be really careful, read between the lines, figure out, is this something you really want to go into?"
The On Your Side Investigators spoke with One Reverse Mortgage CEO Richard Mandell. It's a division of Quicken Loans. He says reverse mortgages can be an incredible product for some, but admits it's not for everyone.
Mandell says they spend a lot of time trying to educate customers about the process.
There are also federal requirements that require reverse mortgage applicants to go through credit counseling.
He says reverse mortgages are now viewed as more of a financial tool as some seniors don't want to liquidate other assets, but would like access to cash.