1. Basic definition of a reverse mortgage.
The main purpose of a reverse mortgage rates are to allow senior citizens to receive money and avoid making mortgage payments for as long as they stay in their homes. Unlike a conventional mortgage where the borrower pays the lender a monthly amount for the total sum borrowed, a reverse mortgage provides senior home owners who are at least 62 years of age with monetary payments from the lender against their total home equity value used as collateral. The loan amount is determined as a percentage of the home value. In essence, the balance of a reverse mortgage does not have to be paid back until the last surviving borrower either permanently moves away from the property or passes away. At that time, the estate of the borrower has 12 months to either pay off the loan or sell the property. Any remaining equity becomes part of the estate.

2. Providers of reverse mortgages.
Reverse mortgages are also known as Home Equity Conversion Mortgages (HECM) because they are insured under the Federal Housing Authority (FHA) program for reverse mortgages per very strict guidelines issued by the Department of Housing and Urban Development (HUD). The providers or lenders for reverse mortgages must be approved by the FHA before they can issue any HECM mortgages. The lenders may be banks, thrift and loan associations, mortgage companies, insurance companies or any other financial institution approved by the FHA.

3. The pros and cons of reverse mortgages.
Reverse Mortgage Pros
- Homeowners may permanently stay in their property.
- Homeowners do not make any monthly mortgage payments.
- Any existing mortgages are paid off.
- Very easy to qualify because credit scores and income verifications are not necessary.
- Homeowners can receive flexible payouts either on a monthly, lump sum, credit line basis or any combination thereof.
- Proceeds of the loan are not taxable.
- Interest rates are lower than traditional mortgages.
- Heirs will never owe more than the home is worth and they will receive any excess of value over the loan amount.

Reverse Mortgage Cons
- The up-front closing costs are high as compared to traditional loans due to FHA mortgage insurance and origination fees.
- Need based government assistance such as Medicaid may be affected.
- Borrowers are still responsible for property taxes, home repairs and homeowners insurance.

Summary
Although, Reverse Mortgage HECM loans are becoming somewhat popular, it is very important for seniors to understand the ramifications of these obligations. In this regard, HUD requires that prior to committing to a reverse mortgages with any lender, all borrowers must receive a HECM Reverse Mortgage Certification of Counseling from a licensed counselor per the guidelines established by HUD. The borrower must be informed about all of the other options available to them as well as the pros and cons of engaging in reverse mortgages.