Reverse mortgages are for borrowers 62 years of age or older who need to tap into their home equity to increase their cash flow. The reverse mortgage is not for everyone so please speak to your financial advisor. The loans offer cash payments or lines of credit tied to home equity. No payments are due until the borrower dies, leaves the home for 12 consecutive months or more, or fails to maintain the property or pay homeowners insurance or property taxes.
Under those circumstances the full balance can become due and payable. Borrowers also pay a loan origination fee, closing costs, and compounding interest on the loan principal, expenses which can add up and become financially troublesome.
Some advisors think that reverse mortgages should be used only as a loan of last resort. If you are thinking of taking out a reverse mortgage, again, please talk to your financial advisor before going loan shopping.