What are the Basics of a Reverse Mortgage

A reverse mortgage is basically the opposite of a regular mortgage. The bank makes monthly payments to you for an equity stake in your home. Many older people have a valuable home but little cash, so this is an option for them. You must be at least 62 years old and own your home outright or almost own it outright. You can keep receiving the monthly payments until the principal and interest of the loan reaches the amount of the home equity. In a reverse mortgage, borrowers don’t have to repay until they sell their home, move out permanently, or die. If this happens, the mortgage is is usually paid off by selling the home or by refinancing into a traditional mortgage.