Dear Mary: My husband talks of a reverse mortgage and thinks it's what we should do. He is 63 and on Social Security disability. I am 55 and work full time. I value your opinion. What do you advise? — Kathy, Missouri

Dear Kathy: A reverse mortgage is a tool that offers a wonderful solution for some people who find themselves in a financial pickle once they no longer are working. But it shouldn't be your first option.

To qualify for a reverse mortgage, you must be at least 62 years old, own your home outright (or owe so little that you could pay it off easily with the proceeds of the reverse mortgage) and be living in the home. Unlike the case with a conventional mortgage, there are no income requirements to get these loans other than proving that you own the property. When the last borrower moves out or dies, the house is sold and the loan becomes due. If there is money left after paying off the reverse mortgage, it will go to your heirs.

Generally, you will have access to a portion of your equity (there are formulas based on your age, the market value of the home and so forth), either as a lump sum or as monthly payments to you. You can stay in the house as long as you'd like, even after you have gone through all of the equity available to you, provided you continue to pay the property taxes.

Sounds perfect, doesn't it? You get to stay in your home, have access to all that cash equity you've been building up over the years, and make no monthly payments. Before you get too excited, let's look at the drawbacks.

First, the fees and loan costs for a reverse mortgage can be very high. Next, it is easy to spend through a lot of cash when it appears to be so free and easy. Remember that your expenses could increase dramatically in the years ahead should you require assisted living.

Is a reverse mortgage the ideal finance tool for all elders? Not likely. However, if things were to get to the point that you are really strapped for cash and healthy enough to care for yourselves in your home, a reverse mortgage could be the ideal solution.

Dear Mary: What are your thoughts on purchasing a home warranty? We had one when we bought our home two years ago. I used it once but did not renew it. Is it a wise idea? — Rebecca, Louisiana

Dear Rebecca: I probably would purchase a home warranty policy for the first couple of years after purchasing the home, simply because of things that slip past that initial home inspection or cannot be seen. However, after that first contract, I probably would not renew it unless I were aware of things that would be covered and could fail in the future.

Do you have a question for Mary? E-mail her at [email protected], or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including "Can I Pay My Credit Card Bill With a Credit Card?" To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.