In a reverse mortgage, if you have little or no balance remaining on your mortgage, the bank pays you for your home. The money is sent as a lump sum or in monthly payments. In most cases, the income from a reverse mortgage does not adversely affect Social Security or Medicare benefits. When you die, your heirs can pay the mortgage off and keep the home, or sell it. For the rest of your life, though, the reverse mortgage can provide necessary funds for items ranging from home repairs to creating a better quality of life.

If you decide that a reverse mortgage is the best plan for you, then you choose from one of several loan types. The most common is a Home Equity Conversion Mortgage (HECM), which is federally insured, has no income requirements and no restrictions on how you use the loan money. It pays to shop around before pursuing this kind of loan. Upfront expenses such as appraisals and closing fees will vary between lenders. With a reverse mortgage, you’re still responsible for utility and property tax payments. Unlike a regular mortgage, though, you keep the title to the house and you can spend your later years in the comfort and familiarity of your own home.