By Christine L. Romero
Gannett News Service
More seniors wishing to boost their income are spurring an increasing number of reverse mortgages across the nation.
The volume of federally backed reverse mortgages more than doubled to 12,848 nationally between October and February, over the previous year.
Reverse mortgages, which have been around since 1984, allow homeowners to get loans that deliver money from the property's equity on a line of credit or in monthly or lump sums.
Instead of making payments to the lender, that company pays the homeowner.
Homeowners owe interest on what they borrow, but they don't have to repay the loan until they move, sell or die.
If the home depreciates, the government takes the hit instead of the homeowner or heirs.
The loans are backed by the Federal Housing Administration.
Some financial planning experts warn of high closing costs and caution that reverse mortgages don't make sense for everyone.
"Classic financial planning says if you are in a negative cash-flow position, there are other problems that need to be addressed," said certified financial planner Michael Black of Scottsdale, Ariz.
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