A reverse mortgage is where the homeowner receives money from the lender. This generally does not have to be repaid for as long as you live in your home. It must be repaid when you die, it is no longer your main residence or if you sell your home. These types of mortgages are great for homeowners who are cash-poor. These allow you tostay in your home but still meet your financial obligatins. Reverse mortgage loan advances are not taxable. They generally will not affect your Social Security or Medicare benefits.

There are three types of reverse mortgages.

• Single purpose reverse mortgages. These are offered by some state and local government agencies and nonprofit organizations. These usually have low costs but have limited availibility and can only be used for one purpose that is specified by the goverment or nonprofit lender. In order to quailify for these loans you have to have low to moderate income.
• Proprietary reverse mortgages, these are private loans that are backed by the companies that have issued them. In order to apply for an HECM (Home Equity Conversion Mortgages), you must meet with a counselor from an independent, government approved, housing couseling agency. The amount of money you can borrow with an HECM depends on your age, current appraised value of your home, current interest rates, your home's location, type of reverse mortgage you select.
• Federally insured reverse mortgages, these are backed by the US Department of Housing and Urban Development. These are more costly than other home loan types. Up front costs are generally very steep and are most expensive if you plan to stay in your home for only a short period of time. They are widely available and have no income or medical requirements and can be used for any purpose desired by you.

As with any other decisions regarding your home and finances, shop around for the best deal for you before settling on one.

AARP
Reverse Mortgages

Reverse.org
Independent Information on Reverse Mortgages for consumers, their families,professional advisors, and nonprofit counselors

HUD
Top Ten Things to Know if You're Interested in a Reverse Mortgage