Eli5: What is a reverse mortgage?
In: 308
With an ordinary mortgage, you borrow money and buy a house, then pay monthly to pay off the debt.
With a reverse mortgage, someone buys your house a bit at a time, paying you monthly to be allowed to have your house when it is either paid off or you either die or go to a nursing home.
They are tricky and you need to make certain you understand both the reverse mortgage and your long-term needs. Sometimes they are a great way to use your house to fund your retirement. Other times they are a great way to lose your house in your twilight years.
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