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How does a reverse mortgage work?

Unlike traditional home mortgage loans, a reverse mortgage provides homeowners with payouts from their equity as a loan in the form of a lump sum, fixed monthly payments, a line of credit, or a combination of the three. The loan is due and payable using the proceeds of the sale of the home or the proceeds from a refinance when the last borrower or eligible non-borrowing spouse moves out of the house or passes away.