A reverse mortgage is a loan with a house as collateral. Over time, the purchaser pays off the loan and owns a higher proportion of the worth of a home. With a reverse mortgage, a bank or other financial institution pays the owner of the house for part of its worth on a regular basis. Over time, the owner of the home owns less of the house (has less equity).
Like other major financial transaction, be very careful of what you sign or commit.
Reverse Mortgages can make sense for older, retired owners, who need some extra cash and whose house is one of their major investments.