Request a reverse mortgage loan
Different types of reverse mortgage loans exist, but to make this simple we are talking about the most popular -- a Home Equity Conversion Mortgage, or HECM. The Federal Housing Authority's reverse mortgage loan program offers HECMs.
"It's a way for people 62 years of age and older to access some of the equity they've earned in their home without selling the house," says Laura Kiel, of Kiel Mortgage in Renton, Washington. "You can receive your funds as a lump sum at closing, paid to you in equal amounts each month, in a line of credit available to you or a combination of all three."
If you choose a home equity line of credit, that money increases over time, she says.
Out-of-pocket fees vary by mortgage company, but average around $700, Kiel says. There's also mandatory counseling, which requires a fee, to make sure you completely understand the loan and its terms. That fee usually runs $100 to $200.
FHA insurance is also factored in to the reverse mortgage loan amount. When you get a reverse mortgage loan, you no longer have monthly mortgage payments, but you still must pay the taxes and insurance on your home.
Should you sell your home, the loan is repaid with those funds.