What’s the deal on Reverse Mortgages?
I’m sure you have seen one of the TV commercials where the couple says we have paid for our home and now it’s time for our home to pay us. Well a “reverse mortgage” does just that. It’s similar to the regular home equity loan where you borrow against your equity, but you don’t make any monthly payments. In fact you don’t make any payments at all. You actually receive payments. You can set it up to receive a monthly payment or set up a line of credit to tap into whenever you want.
As usual, there are requirements. To begin with, reverse mortgages are only for people 62 years of age and older. It’s designed to help seniors in their retirement years. It’s really a good possibility for those who are strapped for cash and would otherwise have to sell their home to raise money. With the reverse mortgage, you can borrow the money and still live in your house without making any payments on the loan. The loan does have to be repaid at the time or your death or if you sold the home. So instead of leaving your house to your kids, leave them the mortgage to pay back.
I don’t have the time to go into the pros and cons of getting a reverse mortgage, but there are several sources online to get good information. The largest source of reverse mortgages are from the Dept of HUD (www.hud.gov) or you can go to the website for the AARP (www.aarp.org) and search reverse mortgages. Or just Google reverse mortgages.
Filed under: Mortgage and Lending by Dwight's Real Estate Update