A reverse mortgage is something you may have heard of before, but most people don’t know what it means. Essentially, it is exactly what it sounds like. Instead of you making payments to the mortgage lender, they’re making payments to you based on the appraised value of your home (up to $625,500).
In order to qualify, the borrower must be at least 62 years old in addition to meeting several other restrictions. So this is a way for older homeowners to collect cash in their retirement. However it does have its drawbacks. For example, you are giving up the equity you have built up in your home, essentially selling it back to the bank and leaving less for your heirs.
For a complete list of reverse mortgage pros and cons, go here.