Probably the main reason that few elderly homeowners have taken advantage of reverse mortgages is that they have no idea what they are or that they even exist. Much like a home-equity line of credit, a reverse mortgage applies the same concept, but the money is not required to be paid back until the home is sold. This option allows cash-strapped elderly homeowners the opportunity to use some or all of the equity in their homes while they are alive. By doing this, they are able to live more comfortably and independently. Both government and private programs exist.

Generally to qualify --

• You must be at least age 62.
• If you’re married, your spouse must also be at least age 62.
• You owe very little or nothing on your home.
• Applicants must agree to accept mortgage counseling from a federally approved counselor.

Once the reverse mortgage is in place, there are several different ways to tap into the money.

Option #1: A line of credit is created and the funds can be drawn upon as needed.
Option #2: A monthly payment is received by the borrower over a certain number of years.
Option #3: A monthly payment is received by the borrower as long as the borrower occupies the home.