A reverse mortgage is a mortgage loan for people over 65 years of age through which a financial institution pays a monthly amount to a person on the condition that they use their home as collateral. The amount to be paid by the financial institution varies according to the appraisal value of the home and the age of the applicant of the loan. The higher the value and the greater the age, the higher monthly amount can be received.
The debtor can use the amount of the loan as a total amount or as constant periodical amount. The debt is only demandable by the creditor. The guarantee will be feasible when the borrower dies.
The heirs, after the death of the mortgagor, can cancel the loan in the period prescribed by paying the creditor all the instalments with their interests. The creditor cannot demand more money for the cancellation.