A reverse mortgage is a loan against your home equity that requires no repayment for as long as you live in your house.  The loan will be paid off when you cease to live in your home.  There are no monthly payments and you can choose to get the money in one lump sum or in monthly payments.  The money is also tax-free. 

 
A reverse mortgage requires no monthly payments and therefore you do not have to worry about not making payments or losing your home.  You can qualify for a reverse mortgage if you are 62 years of age or older.  The loan amount is determined by how much equity your home has built as well as what the current interest rates are, etc.  Your personal credit has nothing to do with whether or not you will qualify.  If you are still paying on your existing mortgage, the amount that is left will be used to pay off your mortgage. 

 
For example, say if you have you owe $100,000 on your existing mortgage and your house qualifies for $125,000 reverse mortgage and you plan on living in the house for at least another 5 years.  Your current mortgage would be paid off and you would have $25,000 to do whatever you want with.  You could put a down payment on a vacation home, take the vacation of your dreams or give the money to your grandchildren for college.  It is completely up to you what you choose to do with the money.  The loan is repaid when you cease to occupy your home. The amount owed can never be more than the value of your home. If your home is sold for less than the mortgage, the rest of the money goes to your estate.