First of all, reverse mortgages are not meant for everyone and according to Housing Counselors, should not be used unless it’s a necessity.

Essentially, this loan is borrowed against your home’s equity and is paid out in a lump sum or in monthly installments to the homeowners. The amount of a reverse mortgage that a homeowner can qualify for depends on factors such as the age of the youngest homeowner (the older that person is, the more they will qualify for), and the home’s equity-value. A major problem that can arise while applying for a reverse mortgage is that both homeowners may not be over 62. Housing Counselors warn that there have been cases where the younger homeowner takes their name off the mortgage so that they can qualify for more money. This is not recommended because the younger homeowner may lose the home if the older owner dies.

Factors considered for a reverse mortgage include, you are 62 or older and have equity built up in your home. This type of loan is very costly and should only be used if you are home rich but cash poor or are struggling to meet your monthly expenses. It is not recommended that you take out a reverse mortgage for gifts or vacation. A reverse mortgage may be more necessary to help with the rising costs of food, drugs and other household expenses that according to a study taken by AARP, has contributed to a surge of bankruptcy filings by the elderly. This study found that from 1991 to 2007, there was an increase of filings equaling 125% for people aged 65-74 and 433% for people aged 75-84.

While reverse mortgages can help out certain people in certain situations, Housing Counselors advise to look into other options such as a home-equity loan before taking into account this very expensive type of loan.

During hard times, you may find yourself in a position where you may have to face possibly foreclosing on your home. Foreclosure prevention counselors advise that this has become a very common situation for many Americans these days and unfortunately, it has caused a new trend among scam-artists.

Beware of foreclosure rescue scams! There are many fraudulent organizations posing as legitimate foreclosure prevention organizations. They claim they can save your home and further claim they have successfully been helping clients for many years. In many cases, the homeowners who respond to these con artists usually end up losing their home, resulting in the con artist walking away and pocketing the equity.

Always use caution when searching for companies which claim to provide foreclosure assistance. Do not work with an agency who:

• Asks for an up-front fee before providing you with any services.
• Tells you to send a mortgage payment to them (you should never send payments to anyone other than your lender).
• Asks you to sign your house deed over to them.
• Is pushy or rushes you into filling out and signing loads of paperwork.
• Guarantees they can save your home before reviewing your situation.
• Cannot clearly explain the steps to be taken to save your home.

On the other hand, there are many agencies that can truly help you save your home. If you decide to go with a foreclosure prevention agency, housing counselors advise you to carefully research the company. Look for a reputable agency which does the following:

• Offers a free initial consultation to go over your unique situation.
• Takes the time to fully explain the process.
• Shows an honest success rate and does not claim to be 100% successful.
• Is registered with the Better Business Bureau and has a good record with them (click here to visit the Better Business Bureau).
Although it may be difficult to make sound decisions due to stress while facing a foreclosure, it is important to use extreme caution! Housing counselors advise that picking the right agency can make the difference between saving and losing your home.