Reverse Mortgage Loans
A reverse mortgage is a real estate loan made to a homeowner who is age 62 or more and who has substantial equity in their home. Unlike other home loans, the borrower is not required to make monthly payments on a reverse mortgage loan. Instead, the entire loan balance, up to a limit, must be repaid when the borrower sells the home or dies.
Borrowers may obtain a lump-sum payment, monthly payments, or a line of credit that can be drawn upon at the discretion of the homeowner. Another option is to take a combination of payments. The loan proceeds are not taxable because they are not income.
Borrowers are not required to qualify for a reverse mortgage loan except for having sufficient equity in their home and being age 62 or greater. There are no credit score requirements.
The proceeds of a reverse mortgage loan can be used for any purpose.