Reversed annuity mortgages are a great way to advance cash from your future to the present day. Reverse Annuity Mortgages (RAM), or reverse mortgages or home equity conversions, signify an arrangement in which a homeowner borrows against the equity of his home and in turn receives monthly tax-free payments from the lender. One of the first RAM programs still in existence, it was developed by the department of Housing and Urban Development (HUD). An amount equal to a percentage of the appraisal value of the house is provided as a loan, which is paid to the homeowner in the form of an annuity.

The main requirements for these loans are that the borrower should be 62 years or older and should own a home. Reverse annuity mortgages will supplement the income of a retired citizen; the amount can be used for home-care or other specialized services.

In the case of a reverse mortgage annuity, the total amount of cash one actually gets will depend on how long one lives. The place where one lives does not matter. Reverse mortgages by themselves are tax-free, but choosing annuity payments can affect one?s eligibility for Medicaid and Social Security, and the income obtained maybe partially taxable. The repayment will be harder in annuity, because as the individual grows older, the annuity repayment amount will also go higher.

The various terms and conditions of reverse annuity mortgages can be quite complicated, so before making a decision, make sure that you take advice from a counselor, attorney or any other professional source.