What is reverse mortgage?

A reverse mortgage is a type of home loan that allows older homeowners age 62 and older to convert some of the equity in their homes into tax-free cash. Instead of making monthly payments to a lender as with a traditional mortgage, the lender provides you with cash in the form of a lump sum, line of credit, or monthly payments.  

The loan does not need to be repaid until you no longer live in the home permanently - typically when someone dies, move into assisted living, or sell the home. At that point, your heirs or estate must repay the reverse mortgage loan balance, which may exceed the value of the home. Any remaining equity then goes to your heirs.