Reverse Mortgage
A reverse mortgage lets homeowners 62 and older borrow against their home equity and receive payments instead of making them, with the loan repaid when they sell, move out, or pass away. It can supplement retirement income but steadily shrinks the equity you leave behind.
The common form is the HECM, insured by the federal government and available from age 62. Nothing is repaid while you live in the home; the balance grows as interest and insurance premiums accrue, and becomes due when the last borrower dies, sells, or moves out for more than twelve months. Because it is non-recourse, neither you nor your heirs owe more than the home is worth when it is sold — but the equity consumed is equity your heirs do not inherit. Default is possible without missing a payment: you must keep paying property taxes, insurance and upkeep, and failing to do so can force repayment. HUD requires independent counselling before you can proceed, which is the right place to start.
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