Reverse Mortgage
A type of investment typically offered to the elderly, where a homeowner can take a loan out against the value of their home without making monthly payments to repay the loan. The loan balance increases every month based on the loan’s interest rate and is only paid back in one lump sum after the borrower dies or the home is sold. Proponents of reverse mortgages argue that it allows retired persons to take the value built up in their home and use it to fund their retirement (without needing to tell their home). Opponents argue that it is a complex financial instrument that frequently confuses the borrowers.
