Boyce Watkins, a writer and finance professor at Syracuse University, says one often neglected aspect, and downside, of reverse mortgages can be the emotional impact.

“You’re facing your own mortality,” Watkins says. In addition, reverse mortgages affect where the homeowners live, how medical bills will be paid and what the future holds inasmuch as financial security is concerned. Most adults nurture the idea of leaving something to their children and believe their home is sacrosanct. Parting with even a little of its value can be traumatic.

Watkins sees reverse mortgages as similar to secured credit cards. “It looks a lot like free money, and a lot of people miss the fine print,” Watkins says. “Many customers only pay attention to two or three variables in a loan.”

Depending on where you live, Basich says, the proceeds from a reverse loan could prove a barrier to qualifying for Medicaid, which counts loan proceeds as an asset.

Although each state differs in the fine print, untapped equity in the home is not considered an asset in determining Medicaid eligibility, as long as it’s owner-occupied. Recent federal legislation placed the home-exemption ceiling at $500,000.

For a homeowner with property worth more, there’s definitely an argument for obtaining a reverse mortgage and then spending down the cash. But that cash is also subject to Medicaid’s new time limitations on asset reduction. Talk to an eligibility specialist early in the process to see where you stand.

Additionally, Basich says, the terms of many reverse mortgages knock homeowners out of their homes after a period of absence, which varies from lender to lender. He says some reverse mortgages require the full loan balance plus accrued interest be repaid when the house is vacated by the owner for a specified period — like a prolonged, but temporary, nursing-home visit.

“Can you imagine if you have nowhere to go to?” Basich says. “What incentive do you have to get better?”