Harrisburg, Pa. - They're supposed to be the golden years, but if cash is tight, retirement can be tough. For some older people who own their home, a reverse mortgage may seem like the answer.

"A reverse mortgage allows you to extract equity from your home and that money doesn't have to be paid back until you either pass away or sell the home," said Dan Egan, a spokesman for the state Department of Banking.

Reverse mortgages are loans aimed at people 62 and older, who can cash in some of the equity in their home and receive a lump sum, a line of credit, or monthly payments. The money can be used for any purpose.

But the Department of Banking urges caution in choosing a reverse mortgage. Processing fees can be as high as $6,000. Terms of a reverse mortgage can be complex and difficult to understand. An heir's inheritance could also be affected.

"If the family is counting on inheritance of that house when you pass on, that may not be possible with a reverse mortgage because it needs to be paid back," Egan said.

Some seniors at the Friendship Senior Center in Lower Paxton Township, Dauphin County said 'no way' to a reverse mortgage. "Gee. Mortgage your house so you can feel secure? I don't need it," said John Sardelis of Dauphin.

But others said they have a reverse mortgage and that it is helping with expenses. The bottom line, a reverse mortgage is a big decision and should be a family decision.

The Department of Banking has a brochure on reverse mortgages available at their Web site, www.banking.state.pa.us.

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