What is a "reverse mortgage"?

A reverse mortgage is specifically designed for seniors, allowing them to convert a portion of their home equity into cash while retaining ownership of their home. This financial product is particularly beneficial for older homeowners who may need liquidity for living expenses, healthcare, or other necessities without the burden of monthly payments.

In a reverse mortgage, the lender pays the homeowner based on the equity of their property, and repayment is typically required only when the homeowner moves out, sells the home, or passes away. As such, the program is tailored to support those who wish to stay in their homes while accessing funds without the pressure of regular mortgage payments.

Other options describe different types of loans that do not align with the unique characteristics and purposes of a reverse mortgage. While one mentions a loan that requires repayment after a set term, reverse mortgages have different repayment conditions. The option referring to a traditional home loan for first-time buyers does not apply here, as those loans are aimed at acquiring homes rather than leveraging existing equity. Lastly, a mortgage exclusively for investment properties does not fit with the primary feature of a reverse mortgage, which focuses on the residential needs of senior homeowners.