The fact is that as people get older and retire, it can be a difficult transition to learn to live on a fixed income. While many people try to plan well for retirement, it somehow never seems like enough. And let’s face it, having to leave your home could very well be one of the most stressful experiences when you are well into your golden years. However, for many, it is a very troubling reality. The loss of regular income accompanied by higher medical bills and other living expenses means that it can be harder than ever just to live. So what can a senior do? A reverse mortgage is one option.

Essentially, a reverse mortgage loan is a loan on your house that you never pay back as long as you live in it. You essentially use the value of your home as cash without having to vacate or handle a monthly mortgage payment. You can receive the cash as one large lump sum payment or in several smaller installments. You can even get it as a line of credit. The best part is that nothing has to be paid back until you die, move or sell your home.

The benefits of this kind of mortgage are numerous and include: no taxes to pay on the money you receive, no pre-payment penalty, you still have the title to your home, you can use the money for anything and the list goes on. Moreover, in contrast to something like a home equity loan, a reverse mortgage has no income considerations because you are not required to make a monthly mortgage payment. Therefore, income is not a factor. In fact, if you have no income at all, you could still get a reverse mortgage.

What is better is that the more valuable your home is and the older you are, the more you can usually borrow. Eligibility requirements simply dictate that you be 62 years of age and your home must be paid in full or you must have a mortgage that can be completely paid from the equity on the home.

It should be noted that there are some drawbacks to a reverse mortgage. Those drawbacks include higher costs as fees for reverse mortgages are based on the overall value of your home. Another potentially negative factor is that there are limits on the loan because of government caps, ranging from $200,160 - $362,790, depending on the area in which you live.