Davis County -- Reverse mortgages are a new way to give seniors a chance to get some extra income, but is it the right way? People spend almost all of their adult life paying a house payment. Retired couples often have accrued thousands of dollars of equity that doesn't become cash until the house is sold. A reverse mortgage is a way to get that value back out of the house while living in it. A reverse mortgage takes from the equity that a homeowner has built over the years and gives it back in the form of a loan. That loan can either pay off the mortgage or give cash in any type of installment. The homeowner gets that money as long as they live there. The equity continues to shrink as long as the homeowner uses the loan. In turn the amount of the loan increases. The longer the borrower lives the smaller a percentage of the house is paid off.

Signing a reverse mortgage doesn't sell the house to the bank. The house still passes on to the heirs the same way it always would. The heirs can choose to pay off the mortgage and the loan subsequently keeping the house, refinance the house or simply sell the house and keep the remaining equity.

It gets mixed reviews from bankers who deal with reverse mortgages. Mortgage Officer Gerard Van Gils of Utah First Credit Union calls reverse mortgages a gimmick. "Typically it's expensive in fees and higher in rates. You're paying a higher interest rate and paying more interest as you go," said Van Gils.

He recommends that people seek other alternatives first. "The majority can be just as well served by something different," said Van Gils.

Van Gils gets inquiries about reverse mortgages once a week, but once he describes all the ramifications, his customers always choose another type of loan.

Financial advisor for the Rocky Mountain Mortgage Group C. Spencer Reynolds added, "there are other better ways to prepare so you don't have to do it."

Wells Fargo representative David Thompson disagrees. "Usually it's a very wise use of their equity," said Thompson.

Jason Farr of Alpine Mortgage said, "the fees wouldn't be more excessive than conventional loans."

The interest is regulated and determined by the FHA. "There are a great many protections built in for the seniors. They're probably the most regulated mortgages in the country," added Thompson.

For starters banks don't even choose an interest rate. It's regulated and determined by the FHA.

Since the loan amount is covered by the equity, reverse mortgages don't ask for a credit check.

It is growing in popularity too. Thompson was the only reverse mortgage specialist for Wells Fargo in Utah. Now there are six.

State and local governments offer the lowest cost reverse mortgages. Private sector reverse mortgages can include application fees, origination fee, closing costs, insurance, and a monthly servicing fee. Interest is also charged on private and government loans.

It lasts as long as you live in the home, you don't have to reapply for it every four or five years like many loans.

All agree it is important to research reverse mortgages and other loan options before making a decision.