Reverse mortgages are aptly named. Take almost everything you know about mortgages, turn it around backward and you'll begin to understand this unique mortgage product. Here is how a reverse mortgage differs from a standard mortgage. 

How Does a Standard Mortgage Work?

• Borrowers may not get approved for a loan if they have bad credit.
• Borrowers must have sufficient income to repay the loan.
• Borrowers get money from the lenders and then must immediately begin making payments until the loans are repaid.
• In many cases, borrowers' payments can be adjusted by the lenders and payments can increase.
• Borrowers who default can lose their homes, and in many cases the lender can pursue them if the home foreclosed on is worth less than the amount owed.
• You can keep your home and your mortgage even after you move out. You could choose to keep it as a rental, for example, as long as you continue to make your payments.

How Does a Reverse Mortgage Work?

• Borrowers with poor credit can get the same terms as borrowers with good credit.
• A borrower's income is not considered, since he or she will not be required to make payments on the loan.
• Borrowers can choose how to take their money: as a lump sum, a series of regular payments, a credit line to be used as needed, or a combination of methods.
• Borrowers can never have their home taken away, even if they owe more than it's worth. Nor can the lender go after them for additional funds.
• A reverse mortgage must be repaid once the borrower moves out, sells the property, or dies. Any remaining equity is returned to the borrower or heirs. 

While not for everyone, reverse mortgages can be lifesavers for seniors who are house-rich but cash-poor, are in decent health, and don't want to leave their houses. Educate yourself about the pros and cons of reverse mortgages, learn how (and how not) to shop for a reverse mortgage, and consult a finance professional if you're considering taking on one of these special-purpose home loans.

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