Reverse Mortgage is a type of home equity loan that allows the borrow to convert the equity in their home into cash while retaining ownership of the home. Reverse Mortgage function like traditional mortgages, only in reverse. Rather than making a payment to your lender each month, the lender pays you. Unlike a conventional home equity loan, most Reverse Mortgages do not require any repayment of principal, interest, or servicing fees for as long as you live in your home. The borrower my use the proceeds from their Reverse Mortgage for anything they desire.

To qualify for a Reverse Mortgage, you must own your home. The Reverse Mortgage funds may be paid to you in a lump sum, in monthly advances, through a line-of-credit, or in a combination of the three, depending on the type of Reverse Mortgage and the lender. The amount you are eligible to borrow generally is based on your age, the equity in your home, and the interest rate the lender is charging.

A borrower must own their home to qualify for a Reverse Mortgage. The borrower remains responsible for taxes, repairs, and maintenance. Normally a Reverse Mortgage becomes due with interest either when the borrower permanently moves, sell their home, dies, or reaches the end of the pre-selected loan term. The lender does not take title to your home when the borrower dies. The heirs must pay off the loan. The debt can repaid by refinancing the loan into a forward mortgage or by using the proceeds from the sale of the home.