How does a reverse mortgage work?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A reverse mortgage lets homeowners 62 and older convert equity into cash without monthly mortgage payments. The balance grows over time and is repaid when you sell, move out, or pass away.
You keep the title and must keep up taxes, insurance, and upkeep. It's a niche tool for retirees who are equity-rich but cash-tight. We'll walk through whether it fits or whether a HELOC or downsizing makes more sense.
Turning equity into income
A reverse mortgage lets homeowners aged 62 and older turn home equity into cash without monthly mortgage payments. The loan is repaid when you sell, move out, or pass away.
You can take the money as a lump sum, monthly payments, or a line of credit.
Key points to understand
You still own the home and must keep up taxes, insurance, and upkeep. The balance grows over time since you are not making payments, which reduces the equity left to heirs.
It is a major decision, so we explain it fully. Reach out and we will see if a reverse mortgage fits your goals.