Reverse Mortgage
A loan for homeowners 62 and older that converts home equity into cash with no required monthly payments.
What does reverse mortgage mean?
Instead of paying the lender, the homeowner receives money and the balance grows over time, repaid when the home is sold or the owner moves out or dies. Most reverse mortgages are FHA-insured HECMs, and they reduce the equity left to heirs.
Related terms
Reverse Mortgage — frequently asked
How does a reverse mortgage work?
A reverse mortgage lets homeowners 62+ borrow against their equity and receive cash while staying in the home, with no monthly loan payment. The balance grows over time and is repaid when you sell, move out, or pass away.
What are the downsides of a reverse mortgage?
Fees and interest are high, the growing balance erodes the equity you leave to heirs, and you must keep paying taxes, insurance and upkeep or risk default. It suits some retirees but is rarely a first choice.