There are three basic types of reverse mortgages:

1. Single-purpose reverse mortgages offered by state and local government agencies or nonprofit organizations. These usually have low costs but are only available for the purpose specified, such as home repairs and improvements or property taxes. Low income applicants usually qualify for this type of loan.

2. Home Equity Conversion Mortgages, or HECMs which are federally insured through HUD, the department of Housing and Urban development. Meeting with a government-approved housing counseling agency is required before you apply for this type of loan.

3. Private loans through other lenders who offer proprietary reverse mortgages.

Remember, you must be at least 62 years of age and live in your own home to qualify for most reverse mortgages. Proceeds are tax-free but the interest is not deductible from your income tax until the loan is paid off.

The most important step to take before considering a reverse mortgage is to consult a financial counselor.