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Definition of Reverse Mortgage from Mortgage Glossary

Reverse Mortgage, Reverse Annuity Mortgage, RAM

A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home.

A mortgage used by the elderly that provides income as a way of converting their home equity into a cash payment (or series of payments) while retaining ownership of their property. Payments made cause the loan principal to increase.

To qualify for a reverse mortgage in the United States, you must be at least 62 years old and have paid off all or most of your home mortgage.

The lender allows you to stay in your house until you sell it, move out or die. If you live with a partner or spouse and they’re joint owners of the house, the reverse mortgage would be in both names so your home is protected as long as one of you lives there.

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