Eli5: What is a reverse mortgage?
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For simplicity sake, say you have paid off the mortgage on your house and own it outright. Taking out a reverse mortgage is just a loan, but your house is the collateral. However, as opposed to a Mortgage or a HELOC, the point of a Reverse Mortgage is essentially that you get “Free money” and never pay the loan back. You default on the loan and the bank takes your collateral instead (Your house).
In general a Home Equity Loan is a better option – you still get a loan collateralized by your home, but payments are scheduled and you’re expected to pay the loan back with interest rather than lose your house. Your kids would vastly prefer the latter
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