A reverse mortgage lets you stay in your home and get paid by the bank instead of paying it. You keep ownership and live there for life, but interest accrues until you die, move, or the loan term ends, when heirs must refinance or sell to pay it back.
So one of the biggest myths about reverse mortgages since the inception of the program is that somehow the bank is trying to get a hold of your property, and that couldn't be further from the truth. With a reverse mortgage loan, you own the house, you continue to own your home, and you're still responsible for taxes and homeowners insurance, and you can stay there for as long as you live. The loan itself becomes due and payable, and your children or your heirs, whoever that might be at the time of death or maturity, will have to pay back that loan. And that's by either refinancing the house into a loan of their own or by selling the house. But in no means is the bank interested in owning your home. It's simply a loan, a loan that's a little different mechanically than a traditional loan where you're making monthly mortgage payments. It's just in reverse where the reverse mortgage interest is really not collected until a maturity event down the road.
