A reverse-equity mortgage or reverse mortgage provides monthly and periodic payments, or a line of credit, to seniors (age 62 and above) with a paid-up home, based on their age and the home’s value. A reverse mortgage does not have to be repaid until the owner sells the home or dies, or it is no longer a primary residence. You can get a reverse mortgage regardless of your current income. The downside of the arrangement is that borrowing costs are high and you are using up your home’s equity (and your children’s inheritance). Knowing all the facts before you commit is imperative.

The lender pays you the money as a lump sum, in monthly installments, or as a line of credit. You do not have to make payments until you sell your home, move out permanently, or die. The amount of money you owe increases over time. You can keep any proceeds from the sale of your home in excess of what you owe if you sell it before you die.

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