The federal housing department is set to change reverse-mortgage applications. To help prevent defaults on the federally-insured loans, it's expected to require applicants to undergo a detailed financial assessment.

The current default rate is 10 percent - roughly double the level of regular mortgages. With the aging baby boomer population and dwindling prospects for retirement funds, that rate could grow. When a homeowner turns 62 years of age, they become eligible for a reverse mortgage. If approved, they can withdraw equity in their homes as monthly cash, lines of credit or lump sums. When the homeowner moves or dies, the amount borrowed, plus interest, fees and insurance is due. In theory, the product is a reasonable revenue source for retirees, but the small print can be vexing.

What are your experiences with reverse mortgages? Will the new rule limit your ability to borrow against your home's equity?

Guest:

Ramsey Alwin, Vice President of Economic Security, National Council on Aging; Alwin directs NCOA’s Home Equity Initiative, which educates older homeowners on the wise use of their home equity

To contact the NCOA's Reverse Mortgage Counseling 1-855-899-3778