The Fees - Even though the Housing and Economic Recovery Act of 2008 capped origination fees at $6,000 per loan, other fees remain as high as ever. You’ll pay standard closing costs and a mortgage insurance premium fee, which is another 2% of the home’s value. On top of that, you’ll pay a $30 to $35 monthly servicing fee for mortgage insurance, and a $125 fee for mandatory credit counseling, regardless of whether you decide to take a reverse mortgage or not.

Try Cheaper Alternatives - When considering a reverse mortgage to pay off debt or another one-time expense, look for cheaper alternatives first. Credit-counseling agencies may know of programs or grants to help seniors with home repairs at low or no cost.

Reverse Mortgage Fraud - The most common scenario: an insurance agent convinces a senior who just took a reverse mortgage to invest the money in an annuity that won’t begin payments for years, or to buy a long-term-care-insurance policy that may not be appropriate for them.