A reverse mortgage is a type of home equity loan for homeowners 62 or older that doesn’t require monthly mortgage payments and that the home’s equity is generally paid out to the homeowner monthly or in a lump sum.
The majority of reverse mortgages are home equity conversion mortgages, or HECMs. HECMs are FHA mortgages that allow people who are 62 or older to tap a portion of their home equity without having to move. They also can be used to buy a home.
Who should consider a reverse mortgage
- Persons aged 62 and over that do not plan to move from their home and wish to eliminate monthly mortgage payments
- Can afford the cost of maintaining their home, and keep up with property taxes and insurance payments
- Wish to access the equity in their home to supplement retirement income