 TITLE: What Is a Reverse Mortgage? CONTENT: How a Reverse Mortgage Works\n----------------------------\nReverse mortgages are designed for people who are retired and plan to stay in their homes for the long term, own their homes outright or have substantial equity, and need extra money to help with daily expenses. Typically, these are seniors who are living on a pension or Social Security without much other retirement income. As health care and cost of living expenses rise, their fixed income may not keep pace with their financial needs.\nA reverse mortgage allows these homeowners to extract the equity they have built up in their homes by using their homes as collateral for a loan. The amount you can borrow is based on a combination of factors, including the borrower's age, the appraised value of the home and current interest rates. The loan proceeds can be taken as a lump sum, line of credit, fixed monthly disbursement, or a combination of a line of credit and a monthly disbursement. Learn more about how reverse mortgages work. END