What Is Reverse Mortgage?

Contributed by mm | August 15, 2006 3:01 AM PST

AARP site is a great starting point of learning reverse mortgage, and especially how it is different from the traditional "forward" mortgage. Note not everyone can apply: reverse mortgage is only available to homeowners at age 62 or above.

From AARP:

A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:

• all at once, in a single lump sum of cash;
• as a regular monthly cash advance;
• as a "creditline" account that lets you decide when and how much of your available cash is paid to you; or
• as a combination of these payment methods.

No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older.

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