We have all heard about mortgage but how many of us know what reverse mortgage is? An easy way to describe it would be to say that a reverse mortgage allows senior citizens aged 62 and above and in ownership of their own homes to change some percentage of the value of their home (equity) into money that is tax free without requiring the sale of their house or giving up the title to it.

There is a common confusion about reverse mortgage. That is, how does one pay a reverse mortgage? This is easy to answer. The very word reverse answers the question. As opposed to a regular mortgage, in a reverse mortgage the lender makes payments to the customers instead of the other way around. This is why it is called Reverse Mortgage because it works by the payment being paid in the reverse.

Besides this confusion there are several other questions you may want to ask about reverse mortgage. Below is an effort to answer them satisfactorily.

1. Before anything else, a customer is bound to be curious about how much money he or she can get through the reverse mortgage medium. The most important factor companies consider in lending out reverse mortgage is the age of the customer. It is usually lent out to people over 62 years of age. There is also the condition that in case a couple wants a reverse mortgage, the age of the younger of the two is taken into account. Similarly, the market value of the house, the amount you owe on it and in some cases the lending limit in your particular territory are the deciding factors as to how much money you can expect to get from the lender company.

2. Sometimes people who already have an existing mortgage might get interested in acquiring a reverse mortgage. But the question is, are they eligible for another mortgage? The answer is a surprising yes. To qualify for a reverse mortgage it is not a hindrance to already have a mortgage on their house. What matters is that the reverse mortgage should be given number one priority. You will have to accept the condition that you must pay the existing mortgage first and that too as soon as possible. You can even do this by using the money from the reverse mortgage, or in any other way you deem suitable.

3. To qualify for receiving a reverse mortgage you need not have any special requirements related to your income, medical etc.