Reverse mortgages allow older people to borrow the equity they have in their home.
But unlike a traditional home-equity loan, the money borrowed is not repaid in monthly installments. Instead, the homeowners remain in their house and receive income until they die or the loan is terminated. Then, the home is sold and the bank is repaid all cash advances plus interest from the proceeds of the sale. She says reverse mortgages can relieve cash flow problems for some elderly and are a reasonable alternative to purchasing expensive long-term care insurance. She looked at the 1989 government Survey of Consumer Finances to see how much potential income would have been available to older homeowners if they had utilized reverse mortgages.