A Home Equity Conversion Mortgage, or HECM, or a reverse mortgage, allows homeowners who are at least 62 years old to borrow against their equity without selling their home or making payments.

This option may be a good choice for seniors who can afford to maintain their home and pay the costs of homeownership, but want to obtain a lump sum, line of credit, fixed monthly payments or a combination of those.

It's important to understand that an HECM is still a mortgage, says Barbara Stucki, vice president of home equity initiatives at the National Council on Aging in Washington, D.C.

"They are deferring the payments, and the payments are still accumulating over time, and they are paying interest on the deferred payments," she says.

An HECM also entails upfront closing costs and mortgage insurance.

Once borrowed, the equity is no longer available for future financial needs or to be passed on to beneficiaries. Instead, the house usually is sold to repay the loan, which comes due when the senior permanently moves out, sells the home or dies.