Reverse Mortgage

• A reverse mortgage is a mortgage in which someone borrows against their home's equity, or value. No payments need to be made until the borrower dies or the home is sold.
  
  

Interest Only

• An interest-only loan is a loan in which only the interest needs to be paid for a defined period of time. Since reverse mortgages do not need to be paid at all until the house is sold, they are theoretically interest-only, too. If the borrower wants to make monthly payments in the amount of the interest accrued, he is welcome to.
  
  

Line of Credit

• A line of credit is how reverse mortgage funds are generally accessed. They are accessed to the amount of debt available, but interest is only charged on what is used. So if someone has a $200,000 reverse mortgage line of credit, but is only using $20,000 of it, then interest is charged on the latter figure, not the former.