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Reverse Mortgage

Last Updated March 19, 2009

Definition

Program that allows homeowners, typically age 62 and older, to convert the equity in their home to income. Under a reverse mortgage program, the financial institution makes payments to the home-owner . Typical payment options include either in a lump-sum or monthly payments . Terms of payment are usually negotiable and can be for a fixed period or for the life of the homeowner.

Referring Cite

National Reverse Mortgage Lenders Association (NRMLA)

Additional Helpful Information

  • The payment amount is usually determined by the value of the home, the age of the homeowner, and the period for which the payment will be made
  • Social Security or Medicare benefits are not affected by income from a reverse mortgage
  • Income received from a reverse mortgage may affect Medicaid, if the amount received is not spent in full during the month the payment is received.