In general, reverse mortgages are limited to borrowers 62 years or older who own their home free and clear of debt, or nearly so, and the home is free of tax liens.
Borrowers usually have a choice of receiving the proceeds from a reverse mortgage in the form of a lump sum payment, fixed monthly payments for life, or a line of credit.
Some reverse mortgage products also involve the purchase of an annuity that can assure continued monthly income to the senior homeowner even if they sell the home. The amount of money that the homeowner can receive will depend on the type of reverse mortgage, the borrower’s age and current interest rates, and the home’s property value. “Projected Life Expectancy” is used to determine the amount of the monthly payments or line of credit. In general, the older the applicant is, the larger the monthly payments or line of credit will be. Seniors do not have to meet income or credit requirements to qualify for a reverse mortgage.