If you’re thinking about applying for a reverse mortgage, understanding the terminology involved can help you feel more confident throughout the process. Because this type of loan works differently from traditional mortgages, it’s essential to know what the terms mean before making any decisions. Whether you’re exploring your options or helping a family member, this glossary breaks down the most common reverse mortgage terms in a simple and helpful way.

What Is a Reverse Mortgage?

A reverse mortgage allows homeowners who meet the age requirement to borrow against the home equity while still living in the property. Rather than paying monthly for the mortgage, borrowers receive funds as a lump sum, line of credit, monthly installments, or a mix of all three. They must maintain the home and keep up with taxes and insurance, but there are no regular loan repayments until the home is sold or vacated.

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