Reverse Mortgages: 10 Things You Must Know

Get a large wad of cash! Never make a mortgage payment again! Stay in your home as long as you want! Sounds like a great deal, right? Well, for some older homeowners, a reverse mortgage can be. 

For others, it's more perilous than promising. If you’re considering a reverse mortgage, there’s a lot you need to know before signing on the dotted line. 

Here’s 10 things you need to know about reverse mortgages. 

What is a Reverse Mortgage?

It's a loan on your house that lets you tap your home's equity. Like a cash advance, a bank fronts you the money -- either as a lump sum, a line of credit or monthly draws -- and you have to repay it eventually, with interest.

Unlike a traditional mortgage, you don't have to repay the loan during the term of the reverse mortgage. Instead, you or your estate pay off the principal you borrowed and theHomeowners must be at least 62 and should either own their house outright or have paid off most of the mortgage.