Hi everyone and welcome back to Money Girls Quick and Dirty Tips for a richer life.

I'm Laura Adams. If you're like me, you've probably seen TV commercials touting the advantages of a reverse mortgage.

If those ads left you with more questions than answers, I bet you're not alone.

So I'll shed some light on reverse mortgages by telling you what they are, who's eligible for one,

and who should never consider getting one. for

a reverse mortgage is a loan for homeowners age 62 or older who have equity in their home.

Equity is the difference between your homes appraise market value and how much you owe on it.

For instance, if your home is worth $250,000 and your mortgage balance is $100,000,

then you have $150,000 in equity.

It's called a reverse mortgage because a lender pays you

instead of you paying a lender, as with a regular mortgage.

You don't need to show a minimum amount of income or even have good credit to qualify for a reverse mortgage.

You just need equity in your home.

But just as with a regular mortgage, you eventually have to pay back

the lender for the money you borrow. A reverse mortgage can be a quick way to get

money you need, for example, to make home improvements or to pay medical bills, because it gives you access

to a portion of your equity without you having to sell the property, give up ownership,

or make monthly payments.

You can get the money as a lump sum,

as a series of payments, as a line of credit,

or as a combination of these options,

and spend it any way you like.

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