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Reverse Mortgage is an arrangement in which a homeowner borrows against the equity in their home and receives regular monthly tax-free payments from the lender. This is also called reverse-annuity mortgage or home equity conversion mortgage.
Reverse Mortgage Explained
The reverse mortgage is used by senior homeowners age 62 and older to convert the equity in their home into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the home. A lending institution such as a mortgage lender, bank, credit union or savings and loan association funds the FHA insured loan, commonly known as HECM.