Reverse mortgages are a popular way for retirees to use their home equity for extra income. A reverse mortgage lets you use your home equity without needing to make regular payments, and you can stay in your home.

• You stay the owner of your home.
• You can keep living in your home.
• No payments are needed.
• The loan is paid off when your home is sold.

With a reverse mortgage, you borrow money using your home equity as security. If you’re 60 or older, you can usually borrow 15-20% of your home’s value. For each year you’re over 60, add 1%. So, at 65, you can borrow about 20-25% of your home’s value. The minimum loan amount is usually around $10,000. You can get the money as a:

• regular income,
• line of credit,
• lump sum, or a
• combination of these.

You pay off the full loan balance when you no longer need your property (e.g., if you die or move to a nursing home). Your loan is repaid, including interest and fees, when:

• you sell your home,
• you move out, or
• your estate sells your home after you die.

You can also make early payments if you want. You’re protected from owing more than your home’s value.