A reverse mortgage may be used as a source of funds. Under a reverse mortgage, the lending institution advances funds to the homeowner in a lump sum or on a periodic basis (such as monthly). The older the homeowner, the larger the advances can be. Also, the more equity in the home, the larger the advance can be. The residence will be sold at some point in time (normally, after the borrower dies) to pay off the mortgage. The homeowner must be 62 years of age or older.
