Reverse Mortgage

Define a Reverse Mortgage?

A reverse mortgage is defined as a special type of home loan that allows older homeowners to access the equity they have built up in their homes and defer payment of the loan until they pass away, sell, or move out. The loan proceeds are generally provided to the borrowers as lump-sum payments, monthly payments, or as lines of credit.

Most reverse mortgages today are federally insured through the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) program, which means they must comply with the related regulations.

Here are some ways a reverse mortgage can help you:


Receive equal monthly payments as long as at least one borrower lives in, and continues to occupy the home as your principal residence.


Receive equal monthly payments for a fixed period of months that you choose. The amount of equity, and the number of months you choose to be paid will determine the amount of each payment.

Line of Credit

You can also use a Reverse Mortgage as a Home Equity Line of Credit (HELOC), taking unscheduled payments or installments, at any time, in any amount you choose, until the line os credit is exhausted.

Modified Tenure

Maybe you want a hybrid, or combination of one or more of these options? A modified tenure option allows a combination of a line of credit, plus scheduled monthly payments, for a s long as you remain in the home.

Modified Term

Similar to a modified tenure, a modified term allows you to structure a combination of a line of credit, plus monthly payments, for a fixed period of months determined by you.

Lump Sum

You can receive a single payment up to the maximum allowed, with no payments for as long as you live in the home.

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By Diego Loya

Diego Loya is a Realtor - Broker at Home Living Real Estate Brokerage, a Orange County full services real estate company. Over the past 12 years, Diego has helped homeowners sell and buy their homes. He's loves educating and empowering real estate consumers. You can find him on Google, Facebook and Twitter.

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