As stated before, income is not generally a consideration in a reverse mortgage, the loan is against the equity of your house. As you take loan advances, your equity decreases. However, most reverse mortgages contain a nonrecourse clause that prevents the lender from collecting any more than the value of your home as repayment for the loan.

If you have any current debt on your property, it must be paid off first before taking a reverse mortgage. The reverse mortgage will not be due and payable as long as you or other co-owners live in the home, until you sell your home or permanently move from the home.

You are still the owner of your home under a reverse mortgage, so you are responsible for all taxes, insurance and maintenance. Failing to meet these obligations can cause the loan to become due and payable. Certain other circumstances can cause default on the loan and cause it to become immediately due such as renting out all or part of your home, taking out another loan on your home, declaring bankruptcy or having your house condemned as unsafe.

Lenders do usually charge fees for origination of the loan and closing costs. There may also be servicing fees. Interest rates on the loan may be fixed or variable. Understand all the fees associated with your loan.

Next: The three types of reverse mortgages