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WHAT IS A REVERSE MORTGAGE?
A reverse mortgage is a special type of private home loan that lets homeowners convert the equity in a home into cash. While we are all familiar with the monthly payment formats of conventional mortgages, the reverse mortgage, in contrast, allows eligible homeowners (typically those 62 years of age or older) to borrow against the value of their home. The equity built up over years is paid by the lender in a stream of payments (or possibly in a lump sum). Unlike a traditional home equity loan or second mortgage, no repayment is due, under most plans, until the home is no longer used as a principal residence, a sale of the home, or death.
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