A reader asks HerMoney CEO Jean Chatzky: "I see ads for reverse mortgages on TV all the time. What are they, and how do they work?"
Q: Today’s question comes from Janet. She writes: I see ads for reverse mortgages on TV all the time. What are they, and how do they work?
A: A reverse mortgage lets homeowners who are 62 and older borrow against their home’s equity without making monthly payments. Your home stays in your name, but the loan balance grows over time as interest and fees are added. Usually, the loan is repaid when you move out or sell the home. With a reverse mortgage, you’re still responsible for the property taxes, homeowner’s insurance, and keeping the home in good condition – not to mention keeping it as your principal residence.
