Reverse mortgages are not as complex as the decisions that surround these financial and lifestyle wealth management tools.

When a reverse mortgage is the right solution, it is the only choice and, therefore, you must consider it your best friend.

When other approaches would suffice, a reverse mortgage may be an expensive worst enemy.

Here are six questions from a quiz designed to reveal if a reverse mortgage is the right financial step for you:

1. Do you consider that your current property and neighbourhood is the best, and only, place for you to live for now and in the foreseeable future?

2. Do the benefits of home ownership clearly outweigh the burdens for the same period?

3. Whether this is a financial necessity, a lifestyle improvement or a wealth management project, can you relax and enjoy the money from the reverse mortgage, knowing that debt is compounding against the value of your home?

4. If the home equity will be used to invest in the stock market, in an adult child's business venture, etc., where the entire investment could be lost, do you have sufficient remaining financial resources to ensure that you will not be adversely affected or forced out of your home?

5. Have you explored short- and long-term budgets to ensure you will be able to cover rising maintenance costs, escalating insurance costs, increasing tax pressures, and inflation, as well as possible personal or medical expenses?

6. Are you making a decision about a reverse mortgage without feeling pressured and after having taken sufficient time to "live with" the implications before plunging in?

Worst Enemy: If you answered "no" to ANY of the questions in the quiz, a decision in favour of a reverse mortgage may be premature, impractical or ill-advised at this stage.

Best Friend: If you answered "yes" to ALL of the questions above, you might be a suitable candidate for a reverse mortgage. Might because the decision should not be based entirely on the results of a quiz.

It is possible to answer "yes" to some questions on a superficial level, when in fact the real issues have not been thoroughly addressed.

Source The Ottawa Citizen 2008