The costs of a reverse mortgage are higher than those of a standard mortgage. Interest rates on the reverse mortgage are slightly higher than traditional mortgages as well, and there’s a 1.25% annual fee for the mortgage insurance premium imposed by the FHA.

As the homeowner, you will have to continue to pay real estate taxes, insurance and maintenance costs on the house. If you run out of money, the lender may foreclose on you.

The biggest headache for a reverse mortgage may be when you die or decide to sell or move out of your primary residence. John Schaub, my real estate expert and author of the bestseller book “Building Wealth One House at Time,” says that he has received several distraught calls recently from heirs who have inherited houses encumbered with reverse mortgages that become payable at the death of the borrower.