If my understanding of a mortgage is accurate, in that you (for lack of a better word) sell your house to the bank and buy it back, in monthly payments, then a reverse mortgage would be the bank slowly buying your house out from under you. Ive heard it described as a scam to get the old and financially illiterate people out of their homes so the bank can resale the house at a profit. I have to assume I misunderstood some part of this cuz none of that seems like it should be legal.
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A reverse mortgage lets the owner receive the cash benefit of owning their home while they still live.
Grampa Joe paid off his mortgage twenty years ago, so he owns his house, but he has no income.
A reverse mortgage pays Grampa Joe for the sale of his house while he still lives in it. Grampa Joe can then buy food and pay utilities even though he has no income.
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