What type of financial impact can a reverse mortgage provide for seniors?

A reverse mortgage can provide additional cash flow in retirement by allowing seniors to convert a portion of their home equity into cash without requiring them to sell their home. This financial tool is designed specifically for older homeowners, enabling them to access funds for living expenses, healthcare, or other needs while continuing to live in their own homes.

Seniors benefit from this arrangement as it helps supplement their retirement income, allowing them to maintain their lifestyle or manage unexpected expenses without the pressure of monthly mortgage payments. Instead of repaying the loan monthly, the reverse mortgage is generally repaid when the homeowner sells the house, moves out, or passes away, making it a flexible option for those seeking financial support in their later years.

The other options do not accurately reflect the primary financial benefit associated with reverse mortgages. Increased insurance premiums and higher taxation are not direct consequences of utilizing a reverse mortgage. While a decrease in home equity could occur over time as the reverse mortgage is repaid, it does not represent the immediate financial impact that the reverse mortgage is designed to provide, which is a source of cash flow for seniors.