January 15, 2016 in Mortgages

Reverse mortgage cheat sheet

iStock.com/Kativ

The basics:

A reverse mortgage is a type of home loan that lets you convert a portion of the equity in your home into cash.

The requirements:

Age: You must be 62 or older.

Living status: The home has to be your primary residence.

Equity: You’ll need about 40% equity in your home.

Additional costs: No mortgage, but you’ll have to pay the cost of property maintenance, taxes and insurance.

Legacy: Leaving the home to an heir is a less likely option than with a regular mortgage because it can use up the equity in your home. Often, you or your heirs give up the home when the loan comes due (soon after you move out or die).

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You’re a candidate for a reverse mortgage if:

Choices of accessing your equity: