What is a Reverse Mortgage?
A reverse mortgage is a type of loan for homeowners—typically age 55 or older (in the U.S.)—that lets you convert part of your home equity into cash without having to make monthly mortgage payments to the lender (most plans).
How it works
- You keep living in your home.
- The lender pays you either as a lump sum, monthly payments, or a line of credit.
- The loan doesn’t get repaid until a triggering event happens, such as:
- you sell the house
- you move out permanently
- you pass away
What you owe
- The loan balance increases over time because of:
- interest
- fees
- When it’s time to repay (usually when the home is sold), the loan balance is paid from the sale proceeds.
Key points to know
- It’s still your responsibility to pay Property Taxes, Homeowners Insurance, and Homeowners Association Dues (if any).
- You may be required to live in the home as your primary residence.
- The loan balance can grow substantially, which can reduce the inheritance amount for heirs.
Is it right for you?
People often consider reverse mortgages to help with retirement income, but it can be complex.
A good, next step is to speak with a trusted reverse mortgage specialist based in the Daytona Beach area.