Author: Dave Boike, Retirement Resources
Essentially, if you're an American of at least 62 years old, a reverse mortgage allows seniors who own their homes to borrow funds against the equity they've established. Overseen by the Department of Housing and Urban Development (HUD), these are loans against the mortgage principal, and a qualifying individual can elect to access this equity in a lump sum, a line of revolving credit or in monthly payments.
The loan is repaid once the owner of the home dies or a surviving spouse vacates the property. If that property appreciates in value, homeowners can even draw second or sometimes third reverse mortgages. During this time, the homeowner retains the title to his or her property.
