It seems you can't turn on the television or surf the Internet without hearing about how bad the economy is. A lot of people don't have to hear about it because they're experiencing it every day. No one is hit harder by the economic downturn than seniors. Their retirement accounts and social security benefits are dwindling and it seems like there's no hope in sight. Many unfortunate seniors are being faced with the possibilities of foreclosure and even bankruptcy. Retirement is supposed to be a time to enjoy life, not stress about money!

The good news is that there are ways for seniors to dig themselves out of their immediate debts and avoid declaring bankruptcy. One of these methods is known as a reverse mortgage. While "mortgage" usually implies having to pay something, a reverse mortgage is just the opposite. Essentially, it is a loan taken out against the equity on your home, though it's slightly different from a standard home equity loan.

Reverse mortgages are available specifically to seniors – anyone of age 62 or more who owns a house or at least most of one. Even if you're still paying off a mortgage on a home, a reverse mortgage is an option. If you have full ownership of your home then you're entitled to more money than if you are still paying off a home, but either way you can get a nice windfall to help stave off bankruptcy.

You can choose the size of your reverse mortgage, though it is somewhat limited by your exact age, and is of course based on the value of your home. However, the proceeds gained from a reverse mortgage can be used on absolutely anything. You can pay off all of your outstanding bills and probably still have some money left over to save for future expenses or just to do something fun.

Reverse mortgages are relatively worry free. They do not need to be paid back until you either sell your home or pass away. If you sell your home, then the proceeds from the sale will go toward paying off the principal (note that interest is accrued and not paid until the loan ends). If the proceeds from the sale can't cover the loans total amount, then the institution that issued the reverse mortgage simply soaks up the difference. If the proceeds exceed the cost of the loan, then any additional money is yours.

In the event that the loan ends due to your passing, then it is up to your heirs to decide what to do. They can choose to refinance the home if they want to keep it, or they can simply sell it. If they sell it, then the same rules apply – they have no personal responsibility, and if there is extra money after the sale it is theirs.

Reverse mortgages can be a useful tool in avoiding bankruptcy. However, the details are fairly complicated so it's important to understand all you can about them. In every case, you need to take a counseling course that will explain all the finer points of reverse mortgages so you'll know exactly what you're doing.

Visit me at www.nationalreverseexpert.com for help with a reverse mortgage in the Kansas City area.