It is really nothing new, and for many generations our older citizens have often struggled to get by every month. This is particularly true of those who are disabled, retired or on a fixed income for any other reason. In many cases, these folks do have beautiful homes that are either paid off or that have loads of equity in them, but they continue to struggle as inflation and property taxes take bigger bites out of their income. A reverse home mortgage loan might be the perfect answer to this challenging situation, especially for homeowners who are over 62 years of age.

There are several major benefits that seniors can enjoy through the use of a reverse mortgage on their home. The biggest benefit that gets the most attention and that motivates most people to consider this option is the fact that this type of mortgage pays the homeowner. The homeowner can choose to receive the proceeds from a reverse mortgage loans as one lump sum or it can be received each month to supplement the income of the seniors.

This arrangement is quite different from the home mortgage that people take out on a home when they first buy a place. The traditional mortgage leaves the borrower with monthly payments they must make to the mortgage company. With a reverse loan, the opposite happens and a portion of the equity is sent to the homeowner every month from the lender. To qualify, all owners on the title have to be 62 or older.

Reverse mortgages are available to those who are at least 62 and who have a considerable amount of equity in their homes, even if they still have a balance on their current mortgage. In this situation, the original mortgage and any other liens on the home are paid off first from the proceeds of the reverse-style mortgage.

There is a choice to take the proceeds in either a lump sum or monthly payments. Many prefer to receive the payments each month because the interest on the reverse mortgage loan begins to accrue as soon as a payment to the homeowner is made. With a lump sum, the interest amount they pay will be higher as opposed to receiving a smaller amount each month. Therefore, less interest will be charged when a smaller amount is paid out to the homeowners on a monthly basis.

Whichever way a homeowner chooses to access the equity in their home through this type of mortgage loan arrangement, the money received is considered loan proceeds and so it does not affect their status with Social Security and it is not taxable. Because of this, a reverse home mortgage can help older homeowners be much more comfortable in their retirement years without putting their other benefits in jeopardy at all.