With a regular mortgage, you make monthly payments to the lender to buy your home over time. In a reverse mortgage, the lender pays you every month. A reverse mortgage takes part of the equity in your home and converts it into payments to you – it's like an advance payment on your home equity. The money is generally tax-free. Usually, you don’t have to pay back the money for as long as you live in your home. When you sell your home, move out, or pass away, you, your spouse, or your estate would repay the loan. In some cases that could mean selling the home to get money to repay the loan.

Here are the three kinds of reverse mortgages:

• Single purpose reverse mortgages – offered by some state and local government agencies, as well as non-profits;

• Proprietary reverse mortgages – private loans

• Federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs).

Reverse mortgages are a type of loan that allows seniors to access the equity in their home without having to make monthly mortgage payments. The loan is repaid when the borrower dies, sells the home, or moves out of the home.

Reverse mortgages can be a great way for seniors to supplement their income, especially if they are on a fixed income. With a reverse mortgage, seniors can stay in their home and use the equity in their home to cover expenses.

Reverse mortgages can also be a good way to ensure that seniors have money to cover their medical expenses. With a reverse mortgage, seniors can access the equity in their home to pay for medical expenses, which can be a great relief for families.

Finally, reverse mortgages can give seniors the peace of mind of knowing that they will not have to worry about losing their home if they can no longer make their mortgage payments. With a reverse mortgage, the loan is not due until the borrower dies, sells the home, or moves out of the home. This can give seniors the peace of mind of knowing that their home is safe even if they can no longer make their mortgage payments.

There are some downsides to reverse mortgages that seniors should be aware of.

First, reverse mortgages can be expensive. The fees associated with a reverse mortgage can add up, and they can be costly. In addition, the interest rates on reverse mortgages are typically higher than the interest rates on traditional mortgages. This means that the total cost of a reverse mortgage can be quite high.

Second, reverse mortgages can be complicated. The terms of a reverse mortgage can be confusing, and it can be difficult to understand all of the details. This can make it difficult for seniors to make informed decisions about their finances.

Third, reverse mortgages can put seniors at risk of foreclosure. If seniors default on their loan, they can lose their home. This is a serious risk that seniors should be aware of before they take out a reverse mortgage.

Fourth, reverse mortgages can reduce the inheritance that families receive. When a senior dies, the home is typically sold to repay the loan. This can reduce the inheritance that families receive, which can be a difficult pill to swallow.