A reverse mortgage allows you to take advantage of a portion of the equity currently built up in your home. It works the same way as a standard mortgage, in reverse. So, you’ll receive payments monthly rather than having to make payments monthly.
The payments could be used to supplement income, pay down medical costs or debts, cover education expenses, prevent foreclosure, or allow the homeowners to retire.
Unlike a home equity loan, as long as you own the home, you won’t have to pay back the lender.
If the homeowner sells the home or dies, the home must be paid off. If sold, the remainder of the home’s equity is passed on to the rightful heirs.