The homeowner can withdraw a part of the equity present under the home which they own.
The Home Equity Conversion Mortgage (HECM) is the most popular kind of reverse mortgage. This is insured by the federal government. It is provided by FHA-approved lenders, even though these are available in abundance.
Note that reverse mortgages are available only to customers above the age of 62, and are intended for those who claim legible ownership of their homes. In other words, they should have a significant amount of equity to withdraw from.
It might seem a bit strange when people want to borrow against the home for which they worked large portions of their lives. However, this is very common. A reverse mortgage provides a solution to several of life’s challenges. For instance, it helps people get healthcare, repair their homes, have sufficient money for a quick expense, or pay property tax. A reverse mortgage looks to provide a solution to many of these common issues so that they are financially more easily attainable.