Definition
Program that allows homeowners, typically age 62 and older, to convert the equity in their home to income. Under a reverse mortgage program, the financial institution makes payments to the home-owner . Typical payment options include either in a lump-sum or monthly payments . Terms of payment are usually negotiable and can be for a fixed period or for the life of the homeowner.
Referring Cite
National Reverse Mortgage Lenders Association (NRMLA)
Additional Helpful Information
- The payment amount is usually determined by the value of the home, the age of the homeowner, and the period for which the payment will be made
- Social Security or Medicare benefits are not affected by income from a reverse mortgage
- Income received from a reverse mortgage may affect Medicaid, if the amount received is not spent in full during the month the payment is received.
