A reverse mortgage is available to homeowners, 62 years or older. It allows them to convert part of the equity in their home into cash. This type of loan is traditionally used to cover basic monthly living expenses from the accumulated wealth in their home. Unlike traditional mortgages, the lender makes payments to the borrower in a reverse mortgage.
The borrower is not required to pay back the loan until the home is sold or otherwise vacated. As long as the borrower lives in the home he or she is not required to make any monthly payments towards the loan balance. The borrower must remain current on property taxes, homeowners insurance and homeowners association dues (if applicable).