Retirees are living longer than they may have anticipated, and for those who own their homes but are cash-poor, a reverse mortgage might seem tempting. But don’t be taken advantage of. These are often expensive and unnecessary. Though reverse mortgages have their place, it's a rare one. Be cautious.

Reverse mortgages involve homeowners looking to borrow money against their houses. The mortgage doesn't need to be repaid until the mortgage holder passes away or moves out of the home (to a nursing home, for instance), at which time the loan can either be repaid or the house will be sold to repay the debt.

The most common reverse mortgage is the home-equity conversion mortgage, according to the National Reverse Mortgage Lenders Association (NRMLA). These mortgages are insured by the federal government through the Federal Housing Administration with a maximum loan amount of $417,000.

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Loans are given based on the value of your home and your age. The fees associated with this type of reverse mortgage are origination fees, closing costs, appraisal fees and mortgage insurance premiums, the NRMLA says. Mortgage insurance premiums guarantee that if the company managing your account goes bankrupt, the government will take over. Origination fees are 2% of the first $200,000 of your claim and then 1% of the balance thereafter, up to $6,000, the association says. Wells Fargo, Webster Bank, M&T Bank ( MTB - news - people ) and MetLife ( MET - news - people ) all offer products like this.

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