If you are nearing retirement age, you have probably heard a bit about reverse mortgages, even if it's just through commercials and ads. A reverse mortgage is unlike any other mortgage available. As the name implies, this type of loan works in reverse: you are able to access the equity in your home as a lump sum or line of credit without making loan payments. Only homeowners who have equity and are at least 62 qualify for this type of loan. If you meet the requirements, you may benefit from a reverse home loan.There are many potential advantages with reverse mortgages. You will never need to repay the amount you borrow except if the home is sold, you move out, or you pass away. Heirs can walk away and surrender the home, but they will not owe more than the house's value if they want to keep it. These loans also offer flexible terms with many ways to receive your money. This can make it easy to use the loan to finance a new real estate purchase, supplement retirement income, and more.
Reverse loans can be a bit confusing, however. The unique qualifications and rules governing these products are different than any other loan product. Not sure if you should consider a reverse loan? Here's what you should know about how they work.
