A reverse mortgage is a type of home equity loan that allows you to convert part of your home’s equity into cash while retaining ownership. Unlike traditional mortgages, the lender pays you, and you’re not required to make monthly payments as long as you live in the home. You can use the funds for various expenses, such as housing costs, taxes, or maintenance.

Eligibility Requirements:

• Must be at least 62 years old (some programs accept as young as 55).

• Must have at least 50% equity in your home.

• The home must be your primary residence.

Payment Options:
Funds can be received as a lump sum, monthly payments, a line of credit, or a combination, depending on the loan type and lender. Your borrowing amount depends on your age, home equity, and the lender’s interest rate.

Responsibilities:
Even with a reverse mortgage, you retain homeownership and are responsible for property taxes, maintenance, and repairs.
Repayment Terms: Repayment is typically due when you move out, sell the home, pass away, or reach the end of the loan term. Heirs must repay the loan, usually by refinancing or selling the home, but the lender doesn’t take ownership.

Payment Plan Options:

• Adjustable-Rate Plans:

  • Tenure: Equal monthly payments as long as you live in the home.

  • Term: Equal monthly payments for a set period.

  • Line of Credit: Access funds as needed until the credit is exhausted.

  • Modified Tenure/Term: Combination of monthly payments and line of credit.

• Fixed-Rate Plan:

  • Single Lump Sum: Receive all funds at once.