Reverse Mortgage: What It Is, How Seniors Use It

After retirement, without regular income, you may sometimes struggle with finances. If you’re a homeowner, a reverse mortgage is one option that may help you manage your financial challenges.

What is a reverse mortgage?

A reverse mortgage is a home loan that allows homeowners 62 and older to withdraw some of their home equity and convert it into cash. You don’t have to pay taxes on the proceeds or make monthly mortgage payments.

How people use reverse mortgages

You can use reverse mortgage proceeds however you like. They’re often earmarked for expenses such as:

Helping children with college

Buying another home that might better meet your needs as you age

Advantages and disadvantages of reverse mortgages

Your heirs won’t have to repay the loan

The fees cost thousands of dollars

The loan gives you financial wiggle room

The loan reduces your equity in your home

An eligible surviving spouse can stay in the home

You could lose your home if you don’t pay property taxes and insurance

How do reverse…

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This article was written by NerdWallet and originally published on