A reverse mortgage allows eligible older homeowners to borrow against the equity in their primary residence without making regular monthly mortgage payments. The most common type in the United States is the federally insured Home Equity Conversion Mortgage, generally available to homeowners aged 62 or older. Funds may be received as a lump sum, monthly payments, a line of credit, or a combination of these options. The homeowner keeps the property title, while interest and fees are added to the outstanding loan balance over time.
Although monthly mortgage payments are usually not required, homeowners must continue paying property taxes, homeowners insurance, association fees, and necessary maintenance expenses. The loan generally becomes due when the borrower sells the property, permanently moves away, or dies. Because the balance increases and available home equity decreases, a reverse mortgage may affect future housing choices and the amount left to heirs. Before applying, homeowners should compare costs, payment options, and alternatives with a HUD-approved housing counselor. Careful evaluation can help determine whether a reverse mortgage supports long-term retirement and housing plans.