What is Reverse mortgage?
A mortgage that enables homeowners to convert the equity they have in their homes into cash using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. The borrower is paid a set amount of funds, which has the effect of reducing the equity in the home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Sometimes called a home equity conversion mortgage, this product is usually attractive to older homeowners who have accumulated substantial equity in their homes.