Reverse Mortgages are beneficial for people that have a large amount of equity in their homes. They are able to slowly take equity out of the home in order to get money to supplement their income.  The duration to which you can take it out will depend on how quickly you take it out and how much your home appreciates in value.  If your home is experiencing a large amount of appreciation, you may not actually lose any of your equity.

You can go to AARP for more information on a reverse mortgage.

Many senior citizens are taking advantage of the monthly income, lump sum cash loans, long term health care, home improvements, and other necessities a reverse mortgage can pay for. When you take a reverse mortgage on your home you are borrowing from the equity in your home without having to make any payments or move from the home until you sell your home or no longer live there. This can be a great option for seniors who are living on a fixed income and need extra money for something they can not afford out of their budget.

Most reverse mortgages create a situation where the home owner’s debt is increasing while their equity is decreasing. This is due to the fact that a reverse mortgage is a loan on the equity in the home and since no payments are made from the borrower during the term of the loan, interest also accumulates which eventually depletes the equity in the home. This is true for most reverse mortgages, but not true for all reverse mortgages.

In some cases you can actually get a lump sum one time loan where there is no interest charged on the loan. Instead the lender will charge an outright fee for the loan or points in advance in exchange for a 0% interest rate. These loans are rare and hard to find, but they are possible. This would mean that the equity in your home could actually increase after your loan because the amount owed would never change, but the value of the house could increase over time.

It is also possible to keep a high level of equity in your home even with a normal first mortgage. You may be paying interest that is accruing on your loan, but if you live in an area where the real estate prices are rapidly rising, the value of your home could be increasing so quickly that you are still maintaining a high level of equity in your home from the rising prices of property in your area. If you are interested in a reverse mortgage, but are concerned about the possibility of depleting the equity in your home, you should check to see what the real estate market in your area is doing and also look for a lender that would consider charging a flat fee for a reverse mortgage loan on your home. For more help, visit the Reverse Mortgage Specialists or the AARP's Reverse page.