A reverse mortgage is a loan for homeowners age 62 and older that use a portion of the home's equity as collateral. Instead of the borrower making payments to the lender for the loan, the lender pays the borrower based on the equity the borrower has in the real property; hence, the "reverse" part of the reverse mortgage. The lender could give the loan funds as a lump sum, as periodic payments, or even as a line of credit available for whenever the borrower needs it.

A reverse mortgage loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately six months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.