Reverse mortgage loans can be good or bad, depending on a number of factors. Reverse mortgage loans are available to senior Americans who have reached the age of 62 years or above. This is a special kind of loan in which the equity of a home is converted into cash as per the desire of the homeowner. Most people take such loans for personal uses, such as paying off medical bills, home repairs, payment of insurance or any of the other monthly bills. Reverse mortgage loans give the older generation an additional income, apart from the fixed monthly pension they may already be drawing.

The loan amount offered by the lender depends on the value of the home and the type of loan program opted for. The applicant's residence acts as security for the loan. It is also important that there is no other debt against the house.

The loan amount can be received as a one-time lump sum, as monthly income or according to the need through the credit system, as mentioned in the agreement. The amount received through a reverse mortgage loan is tax-free. Reverse mortgage loans need not be paid back in monthly installments, so long as the person resides in the house. The repayment starts on the date when he moves from his own house or sells the property. If the applicant passes away before any of these, the lenders will either sell the property to pay the loan amount and the interest, or the heirs may have to pay the amount.