Reverse Mortgages

A reverse mortgage enables homeowners age 62 and older to convert part of the equity in their primary residence into tax-free cash without having to sell their home or give up title. It is a low-interest loan that uses a home's equity as collateral. It is called a reverse mortgage because rather than the homeowner making monthly payments to a lender, the lender makes monthly payments to the homeowner.

The reverse mortgage process includes important consumer protections, such as a requirement that the borrower talk with an independent third-party loan counselor before securing the mortgage. This helps ensure that borrowers understand the program and have reviewed alternative options.

Key elements of reverse mortgages:

• They enable homeowners to access home equity without making monthly payments
• No income or medical requirements
• Borrower's name stays on the title of the house
• Money can be received all at once, in fixed monthly payments or as a line of credit
• Loan income has no impact on regular Social Security or Medicare benefits