Homeowners 62 years of age or older can convert the equity in their home into a loan that they won't have to pay back until they either die or move out. If they move out, the borrower either has to cough up the cash or sell the home, a move so difficult in today's housing market that they could end up facing foreclosure.

Last year, lenders made more than 115,000 of these federally-insured loans, known as HECMs, compared with just 8,127 in 2001, according to the National Reverse Mortgage Lenders Association, or NRMLA, an industry trade group.

Now, even more seniors may be tempted to take the leap. The Economic Stimulus bill lifted the maximum amount that seniors can borrow to $625,500 in 2009. (Previously, the borrowing limits were tied to the home’s location and were as low as $217,000.) In January and February alone, reverse mortgage lenders originated nearly 46,600 loans on pace to far exceed last year’s numbers.

When used the right way and for the right reasons reverse mortgages can be an effective way to supplement one’s income.