Reverse Mortgage

A reverse mortgage is exactly what it sounds like - a loan whose features make it essentially the reverse of a traditional or forward mortgage. In a reverse mortgage instead of making monthly payments, you receive the mortgage payments. That’s the “reverse” part of a reverse mortgage. Instead of turning your income into equity, you turn your equity into income.

This last feature, turning your equity into income, is what most distinguishes a reverse mortgage from other loans, and it's what makes it so valuable to many senior homeowners. Having spent years repaying the mortgage that allowed you to buy your home, you can now use that investment to help you achieve your later goals in life. Whatever the plans are, whether it’s traveling, paying medical expenses, improving your home, or just adding a bit of luxury to your budget, you now have a golden opportunity to put your nest egg to good use.

You remain the owner of your house for as long as you live there, and you cannot be forced to move. However, your balance cannot exceed the value of your home when you sell it. So no matter how much money you receive through your reverse mortgage, you cannot owe more than your home is worth.