What is the definition of a reverse mortgage? A reverse mortgage is a mortgage loan product that allows homeowners to use the equity of their home to generate tax free income. This is without having to sell their home or take out a new mortgage payment. It is basically the reverse of a standard mortgage loan.

Reverse mortgages are available to homeowners 62 years old or older. Neither income nor credit history is considered by lenders in determining who qualifies, which is another big benefit of a reverse mortgage. Since no payments are required by the borrower, the ability to pay back the loan doesn’t matter. Rather, the most important qualification criteria for a lender are the age of the homeowner, the value of the home and the amount of available equity in the home.

For many older homeowners who have lived in their home for a long time and have been responsible with their debt and refinancing, there is enough equity in the home to make a reverse mortgage a very attractive option. Most property types are eligible, though some cooperatives are not — most importantly, you can only get one on your primary residence.