A reverse mortgage is a type of home loan that allows homeowners age 62 or older to convert part of their home equity into cash without having to sell their home or make monthly mortgage payments. Here's how it works. Instead of you paying the lender, the lender pays you, either in a lump sum, monthly payments, a line of credit, or some combination thereof.

The loan is repaid when the homeowner sells the home, moves out permanently, or passes away. The most common type is the home equity conversion mortgage, which is insured by the FHA.

Here are some key additional points. You must continue to pay property taxes, homeowners insurance, and maintain the home. You retain ownership of the home. The loan balance grows over time as interest and fees accrue. Heirs can repay the loan usually by selling the home or keep the home by paying off the balance.

Reverse mortgages can be a helpful financial tool for retirees who wanna supplement their income, but they aren't right for everyone. It's important to review the pros and cons with a trusted lender or financial advisor. If you're interested to learn more about reverse mortgages and or all of the options available to you, please do not hesitate to reach out to me.