A reverse mortgage is a loan against your home that you don’t have to pay back as long as you live there. With a reverse mortgage you are turning the value of your home into cash without having to pay it back. Payments to you can be made as one lump sum, in monthly payments or in the form of a credit line.

You typically don’t have to pay it back until you die, move out, or sell your home. To be eligible for a reverse mortgage you must own your home and be 62 years of age or older.

With a reverse mortgage you are taking equity out in cash. So with a reverse mortgage your equity decreases and you debit increases. This is just the opposite with a regular mortgage where your debit decrease and your equity increase as you pay off your loan.

So with a reverse mortgage the lender sends you cash each month and you make no repayments. With each payment you receive your debit is increasing and your equity is decreasing unless the value of your home is increasing at a high rate every year.

To sum it up a reverse mortgage is a rising debit, falling equity type of deal.

When a reverse mortgage becomes due and payable, you may owe a lot of money and your equity may be very small. If you have the loan for a long time, or if your home's value decreases, there may not be any equity left at the end of the loan.