Reverse Mortgage
A Reverse Mortgage is a loan in which the lender pays you. Reverse mortgages take part of the equity in your home and convert it into payments to you, basically an advance payment on your home equity. The money you get usually is tax-free.
This loan is generally utilized by senior citizens 62 years or older who own a home with equity but have limited monthly income to live on.
This loan is generally utilized by senior citizens 62 years or older who own a home with equity but have limited monthly income to live on.
A reverse mortgage loan becomes due and must be repaid when a “maturity event” occurs, such as the last surviving borrower (or non borrowing spouse meets certain conditions) passes away, the home is no longer the borrower’s principal residence, or the borrower vacates the property for more than 12 months for medical reason or 6 months for non-medical reasons.
The loan will also become due if the homeowner fails to meet other loan obligations, which include paying their property taxes, insurance, homeowners association fees, and maintaining the property.
The home can be refinanced or sold to bring the loan current when a maturity event occurs. Either you or your heirs would typically take responsibility for the transaction and receive any remaining equity in the home after the reverse mortgage loan is repaid.
There are pros and cons with this loan so make sure to do lots of research before choosing this loan option. Verify all fees and costs with this loan as they can be higher than average.
Depending on your age this loan may not guarantee income for the rest of your life and eligibility for needs-based government programs like Medicare/Medicaid or Social Security Income (SSI), may be affected. Consult with a reverse mortgage specialists for more details.