What is a reverse mortgage?

A reverse mortgage allows homeowners aged 62 or older to convert a portion of their home equity into cash without making monthly mortgage payments. The most common type is a Home Equity Conversion Mortgage (HECM), insured by FHA. Instead of you paying the lender, the lender pays you — as a lump sum, monthly payments, or a credit line. The loan balance grows over time as interest accrues. The loan becomes due when you sell the home, move out, or pass away. Reverse mortgages can supplement retirement income, but they reduce the equity available to heirs and carry significant fees.