Reverse mortgages are home equity loans that allow homeowners to tap into the liquidity of their property--one of many seniors' most valuable assets--while they continue to live there. Though you have probably heard of home equity loans that use the home as collateral, reverse mortgages operate very differently.
While the homeowner in a traditional mortgage pays the lender in installments, the lender in a reverse mortgage pays the homeowner for the life of the loan. The ability to opt-out of monthly loan repayments is one of the many advantages for homeowners who pursue a reverse mortgage.