This is a great time for senior homeowners to take out a home equity conversion mortgage (HECM), especially if they don’t need the extra money now! Sounds crazy? It isn’t, so read on.

The federal HECM reverse mortgage program allows seniors 62 or older who own and occupy their homes to take out a mortgage against it. What makes it a “reverse mortgage” is that the amount owed tends to rise over time, whereas on a standard mortgage it tends to decline.

This difference arises from another one, which is that no payment is required on a HECM until the senior sells the house, moves out of it permanently, or dies. On standard mortgages, as every borrower knows all too well, they must begin making payments immediately.

Another important difference between HECMs and standard mortgages is the role of interest rates. A feature unique to HECMs is that every transaction involves two interest rates.