Core Insights - Reverse mortgages are primarily designed for seniors aged 62 and older, allowing them to borrow against their home equity to access cash [1][5] - The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which is backed by the Federal Housing Administration (FHA) [5] - Reverse mortgages can provide financial relief for seniors by eliminating monthly mortgage payments and offering a steady income stream [6][16] How Reverse Mortgages Work - Unlike traditional mortgages, reverse mortgages pay the homeowner instead of requiring monthly payments [3] - Homeowners can receive funds through regular monthly payments, a line of credit, or a lump sum [3] - Repayment is deferred until the homeowner sells the home, moves out, or passes away, at which point heirs must settle the loan balance [4] Benefits for Seniors - Reverse mortgages can help seniors reduce household costs and allow them to age in place without the burden of monthly mortgage payments [6][7] - They can provide a steady income source for those relying on limited retirement savings or Social Security [7][16] Considerations and Limitations - A significant amount of home equity is required, typically around 50%, and homeowners must be able to cover ongoing costs like property taxes and maintenance [8] - If homeowners cannot maintain these costs, they risk foreclosure [9][15] - Reverse mortgages may not be suitable for those planning to move soon or wanting to leave a substantial inheritance, as they can quickly deplete home equity [10][15] Alternatives to Reverse Mortgages - Other options for accessing home equity include home equity loans, home equity lines of credit (HELOCs), and cash-out refinancing, all of which require monthly payments [13] - Seniors might also consider selling their homes to downsize or renting out extra rooms for additional income [14]