What type of mortgage is designed to help older households access the equity in their homes?

A reverse annuity mortgage is specifically designed to assist older homeowners in tapping into the equity of their homes without the need to sell. This financial product allows homeowners, typically aged 62 and above, to borrow against the value of their home while retaining ownership and residency. Instead of making monthly payments to a lender, the lender pays the homeowner a set amount based on the home's equity, which can be received as a lump sum, monthly payments, or a line of credit.

This arrangement can significantly benefit seniors who may need additional income for retirement, medical expenses, or home maintenance costs, as it provides them with cash flow while enabling them to remain in their homes. The amount borrowed increases over time as interest accrues, and the loan is typically repaid when the homeowner sells the house, moves out, or passes away.

Understanding this option is crucial for real estate professionals working with older clients, as it offers a viable solution for managing financial needs while preserving homeownership.