a financial agreement in which a homeowner relinquishes equity in their home in exchange for regular payments, typically to supplement retirement income.
What is A Reverse Mortgage ?
A reverse mortgage is a mortgage loan, usually secured by a residential property, that enables the borrower to access the unencumbered value of the property. The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments.
A reverse mortgage is a type of home loan for seniors ages 62 and older. · Reverse mortgage loans allow homeowners to convert their home equity into cash income
What is the Downside to Reverse Mortgage?
a reverse mortgage comes with several downsides, such as upfront and ongoing costs, a variable interest rate, an ever-rising loan balance and a reduction in home equity.
What is a Reverse Mortgage in Simple Terms?
In a simple word, a reverse mortgage is a loan. A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment, or line of credit.
What Happens at the end of a Reverse Mortgage?
Usually, borrowers or their heirs pay off the loan by selling the house securing the reverse mortgage. The proceeds from the sale of the house are used to pay off the mortgage. Borrowers (or their heirs) keep the remaining proceeds after the loan is paid off.
Why Would Someone get a Reverse Mortgage?
If you’re 62 or older – and want money to pay off your mortgage, supplement your income, or pay for healthcare expenses – you may consider a reverse mortgage. It allows you to convert part of the equity in your home into cash without having to sell your home or pay additional monthly bills.