What the Heck Is an Annuity Reverse Mortgage?

by Norma
(Topeka, KS)

Annuity Reverse Mortgage

Annuity Reverse Mortgage

That's exactly what I said when a friend told me that her elderly father had gotten an annuity reverse mortgage because he needed the added financial assistance on a monthly basis to help pay for medical care costs.


I found out it’s also known as a reverse annuity mortgage, defining a situation where an elderly homeowner is able to take out a long-term loan for payments or a ‘line of credit’ against the equity that has built up as collateral in the home.

So how is an annuity reverse mortgage different from a regular reverse mortgage? That's another question I had. I did some digging and found out that a reverse annuity mortgage is the same thing as a reverse mortgage, or even a home equity conversion mortgage. Nothing like making it complicated with different terminology!

In a nutshell, a reverse annuity mortgage is a type of mortgage where someone who is over 62 years of age can borrow against the equity that has built up in their home. They can opt for a lump sum cash payment, a credit line, or receive a monthly ‘allowance/stipend/annuity’ depending on the terms of the loan.

The homeowner maintains ownership of the home. This should not be confused with a home equity line of credit or a home equity loan, but simply as another way to enhance monthly income. Keep in mind that in order to qualify for this type of mortgage, the house must not have any liens against it, or a mortgage.

Not all annuity reverse mortgages are the same, so if you're interested, talk to your banker or even your accountant about the different types and options you may have.

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Feb 14, 2015
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Annuity Reverse Mortgage - Are they for Real?
by: Paulette

I've seen the commercials on TV about reverse mortgages and always wondered if they were "for real". This is good information, and I'm going to dig a little deeper to find out more.

Feb 14, 2015
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Annuity Reverse Mortgage - Do Your Homework
by: Edith

This is a good way for seniors on fixed incomes to benefit from additional monthly cash flow, but due diligence is required to understand everything involved in an annuity reverse mortgage - including the type, repayment options, and about potential loan amounts as well as how they are delivered.

Feb 14, 2015
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Annuity Reverse Mortgage
by: Marian

My dad got a reverse mortgage on his house. I was concerned about repayment and looked into it.

Repayment is required when the homeowner sells the home, he or she dies, or the homeowner moves out of the house permanently. Until then, the loan doesn't need to be repaid.

These funds have helped to smooth the bumps out on medical expenses since dad's pension and savings don't seem to be stretching as far as we would like. I guess we may be sacrificing an inheritance in the future or some of it but at least we are not out of pocket for his expenses just yet.

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