A Reverse Mortgage is otherwise known as Home Equity
Conversion Mortgage (HECM).
It is a special type
of home loan for older homeowners.
It requires no monthly mortgage payments.
Borrowers are still responsible for property taxes and
So, it is a type of mortgage in which a homeowner can borrow
money against the value of his or her home.
No repayment of the mortgage (principal or interest) is
required until the borrower dies or the home is sold.
After accounting for the initial mortgage amount, the rate
at which interest accrues, the length of the loan and rate of home price
appreciation, the transaction is structured so that the loan amount will not
exceed the value of the home over the life of the loan.
Often, the lender will require that there can be no other
liens against the home. Any existing liens must be paid off with the proceeds
of the reverse mortgage .