Reverse mortgages can serve as a valuable financial tool for certain homeowners, but they are not a one-size-fits-all solution. This type of loan allows homeowners aged 62 and older to convert a portion of their home equity into cash, delivered as a lump sum, monthly payments, or a line of credit. While this can provide income flexibility, it also involves giving up some home equity and carrying mortgage insurance to protect the lender.
Reverse mortgages can be particularly helpful for older adults with limited income sources. However, they come with risks—such as the potential for reduced inheritance or the loss of the home if loan terms aren’t met.