A reverse mortgage is a kind of equity release, a lifetime loan on your house. Reverse mortgages are not available to everybody; they are meant for people aged 62 and above as a way to use the equity in their homes in addition to their retirement incomes. Homeowners retain the right to live in their homes as long as the provisions of the reverse mortgage are met. These usually entail upkeep of the house and property and occupying the house, except for necessary stays in hospital or nursing facilities.

The Federal government's Department of Housing and Urban Development administers reverse mortgages. To apply for one, visit the Department of Housing and Urban Development's website www.hud.gov. In the search engine at the website, type in "home equity conversion mortgage;" that's the government's name for a reverse mortgage. Or you can call the Department of Housing and Urban Development at (800) 569-4287 for a list of approved lenders.

A reverse mortgage is not the same as a home equity loan. With a home equity loan, you must have enough income to qualify. With a reverse mortgage, your income isn't a factor; rather how much equity you have in your home is one major factor considered. Other factors include your age, interest rates, and the appraised value of your house. With a home equity loan you must make monthly principal and interest payments, whereas the reverse mortgage pays you. Early reverse mortgage programs were somewhat risky, as they only allowed the borrower of the loan to remain in the house as long as the houses value exceeded that of the debt. Now, because of borrower protections, the borrower of a reverse mortgage has a right to stay in the house, no matter how large the accumulated debt, until they die, sell the house, or move out for good.

Reverse mortgages have several advantages. One is the obvious source of supplemental income. Another is that you retain ownership of your home. Should you sell your house, you or your heirs settle the reverse mortgage with the lender and any mount over the mortgage belongs to you or your heirs. Because the money for the reverse mortgage is borrowed from the Federal Housing Authority, or FHA, there are no fees involved. Never use a mortgage service that charges a fee for referring you to an FHA lender. There are of course disadvantages to a reverse mortgage. Obtaining one and spending the money decreases the equity you have in your house. Reverse mortgages may be more expensive than home equity loans or traditional mortgages. Finally, you do need to have enough equity to qualify for one. In the end, you must make the decision as to whether a reverse mortgage is the right choice for you.