Are you a homeowner at least 62 who could use additional tax-free income? If not, perhaps your elderly parents might be interested. Or are you at least 62 and would like to retire but you know Social Security income plus your pension, IRA or other retirement income won't be enough?

A reverse mortgage might be the answer. It pays tax-free income based on the equity in your home. It is the opposite of a traditional mortgage.

To qualify for a reverse mortgage, you must be at least 62. If married, both co-owners must be at least 62. If one is not yet 62, he or she can sign a quitclaim deed to the older spouse, who then becomes eligible for a reverse mortgage.

Reverse mortgages offer you four ways to get your money from the equity: a credit line to be used whenever the homeowner wishes (such as to buy a car, install a new roof or take a cruise); lifetime tenure monthly income; term monthly income (such as for 10 years); and an upfront lump sum for the reverse mortgage maximum. The options can be combined.

A strange feature of reverse mortgages is that the older the homeowner, the better. That's because an older homeowner has a shorter life expectancy and can receive larger cash payments than those closer to 62.

For example, a 65-year-old owner of a $250,000 home can receive about $800 a month in lifetime income from an FHA reverse mortgage. But a 75-year-old owner of the same house can receive about $1,000 a month.

A general guideline is that a 65-year-old homeowner can borrow up to 26 percent of his/her home's market value, a 75-year-old can receive up to 29 percent and an 85-year old can borrow up to 56 percent of the home's market value.

New reverse mortgages are catching on -- growing 76 percent from 2002 to 2003. You can spend the money however you want, and your credit and income are irrelevant. You just can't have unpaid federal bills or be involved in a bankruptcy.

Supplemental Security Income or Medicaid benefits can be reduced if you don't spend all your income from your monthly reverse income in the month that you get it. Social Security and Medicare payments aren't affected.