A reverse mortgage is a financial tool designed for homeowners aged 62 and above, allowing them to convert part of the equity in their home into cash. This type of mortgage is called "reverse" because, unlike a traditional mortgage where you make monthly payments to pay down the loan, a reverse mortgage pays you.

When you take out a reverse mortgage, you receive money based on the value of your home, either through a lump sum, monthly payments, or a line of credit.

The appealing part? There are no monthly mortgage payments required. Instead, the loan balance grows over time as interest and fees accumulate.

​The loan is not due as long as you live in your home and comply with the terms, such as paying property taxes and insurance. It only becomes due when the last surviving borrower moves out, sells the home, or passes away.

The rules around reverse mortgages have evolved to provide more protection for spouses. Now, a spouse under 62 can remain on the title and continue living in the home even if the borrowing spouse passes away, provided the conditions of the mortgage are met.

While reverse mortgages offer many benefits, they are not suitable for everyone. They are best for homeowners who plan to stay in their homes for the long term and need additional income to cover living expenses in retirement. It's essential to weigh the pros and cons and consider how it fits into your overall financial plan.

If you're thinking about a reverse mortgage, talk to us to get a clear understanding of how it could impact your financial situation and if it's the right move for you.

Remember, informed decisions are the best decisions!