What is a Reverse Mortgage?
A reverse mortgage is a type of home loan that lets you convert a portion of the equity in your home into cash. Reverse mortgages are sometimes referred to as a Home Equity Conversion Mortgage (HECM).
Reverse mortgages require that you be:
- a homeowner 62 years of age or older,
- own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan,
- have the financial resources to pay ongoing property charges including taxes and insurance,
- you must live in the home
When the home is sold, or no longer used as a primary residence (ex: you move into an assisted living facility or nursing home), the cash, interest, and other HECM finance charges must be repaid.
More information about Reverse Mortgages can be found here:
Federal Consumer Trade Commission: Reverse Mortgages
S. Department of Housing and Urban Development (HUD): Top Ten Things to Know if You’re Interested in a Reverse Mortgage