Reverse mortgages are designed to help homeowners, 62 years or older, convert their home equity into monthly streams of income, lines of credit or as of January 2009 for the purchase of a primary residence.

A home equity conversion mortgage or HECM for short, is a Federally insured FHA mortgage backed by the U.S. Government. The HECM is a nonrecourse loan, meaning the borrower or their estate will never owe more than the loan balance or the value of the property which ever is less. NO assets, other than the house, will be used to repay the debt even if the house sells for less than what is owed! If there is equity left in the home after the loan is paid back, that equity belongs to the borrower's estate.

Instead of making the traditional monthly payments of conventional loans, reverse mortgages are paid back in one sum when the borrower no longer occupies the property as a primary residence or the last person passes away. This is a great option for someone who has a small mortgage and needs extra income every month. Instead of making the mortgage payments use the reverse mortgage to put those payments back in your pocket every month plus some.

 The Amount of Equity is based on the following

• The age of the youngest borrower.
• The appraised value of the home.
• The current interest rates at the time of funding.

Payments can be received as follows

• In one lump sum
• Tenure - fixed monthly payments for life
• Term - monthly payments for a fixed period as per borrower
• Line of credit
• Combination of the above

 Most reverse mortgages require you be at least 62 years of age, have a low or zero balance owed against your home and maintain the property as your principal residence.