Reverse Mortgage Definition

A reverse mortgage is a loan available to homeowners aged 60 or older (in practice, usually at least 62). The reverse mortgage allows the reduction of home equity through one or more payments. The obligation to repay the loan is deferred until the death of the homeowner, at which time the loan is repaid by the proceeds from the sale of the home. A reverse mortgage allows a retired homeowner to cash out the value of their home equity without losing their home. Why waste it by giving it to the kids? Spend it while you can!