You need money. You need it badly. At 65, however, you don't have the stamina to stomach the inconvenience a long-term loan would require. So, what do you do? You tap into the value of your home and convert it into cash! This is possible through reverse mortgage. Reverse mortgage lenders let you borrow money against your own property.



Why go to a reverse mortgage lender and not a bank? We asked people who have been to their reverse mortgage lenders, and these are the reasons they gave.

1. You do not need to pay back the loan UNLESS you decide to sell your house, change address, or - inconveniently for you and your reverse mortgage lender - die.

2. Release of the loan is not based on credit history. What is it based on then? The equity of your home is one factor, but there are also a host of others.

3. Payments, or non-payment for that matter, to your reverse mortgage lenders would not affect your Social Security, Medicare, or pension benefits.

4. Payments and loan amounts are tax-free.

5. You are given flexible options in receiving your loan. Reverse mortgage lenders could give you your money in a lump sum, in monthly installments, as a line of credit, or as a combination of the three methods.

How does one qualify for a reverse mortgage? Can anyone just call any reverse mortgage lender in the phonebook, and borrow against his or her own house? The answer is no. Reverse mortgage lenders wouldn't touch you with a ten-inch pole unless you pass the following criteria:

1. You must be 62 years or older.

2. You must own your residence. This could be a house, condominium, or a townhouse. Additionally, this property should be listed as your primary residence. If you are co-op owner, you are not eligible.

3. Most reverse mortgage lenders require that there's no other debt against the home.

Before you see any reverse mortgage lender, however, you should be aware of the following:

1. Aside from house equity, other factors reverse mortgage lenders consider are the age of the borrower, interest rates, and the loan fees.

2. Reverse mortgage lenders often give high costs to cover origination fees and closing costs.

3. Even with the help of a loan from your reverse mortgage lender, you will still be the one to keep paying for your property taxes, insurance and general housekeeping of your property.

4. Your collateral is your house. If you don't give up the title or deed of the home at any point, the loan amount can never exceed your home value.

The principle behind reverse mortgage is simple. It treats your house as a valuable commodity, one with parts you could make money out of if you so choose. It gives you an alternative to the usual loans banks offer. Reverse mortgage might not always be the best solution to your cash woes. Still, there's peace of mind that comes from knowing you could always run to a reverse mortgage lender should the need for one ever arise.