Reverse Mortgage

Responsible homeowners who have never even been a day late on mortgage payments and have decades of payments behind them can tap into the equity in their homes as a source of income. A reverse mortgage is a type of home loan which uses that equity and provides you with a portion of the value in cash. The great thing about a reverse mortgage is that you will not have to pay the money back until you no longer use the home as your primary residence.

Reverse Mortgage Rules

If you are over 62 years of age and own your own home (or have a minimal amount of mortgage payments remaining) you qualify to take out a reverse mortgage. With this type of loan, the money does not have to be paid back until you sell your property, move out of your home or die (then your estate will handle the details of repayment).

The cash borrowed through the reverse loan process can be distributed in a number of ways based on your preference. You can choose from a lump sum of cash, monthly cash payouts or as a line of credit. A combination of payouts and a credit line is also available.

Reverse Mortgages and Retirement

Are you considering a reverse mortgage as a way to pay for your retirement? It may be a possibility, but you should review AARP’s top 5 questions to ask yourself before getting a reverse mortgage to see if a reverse mortgage is right for you. That’s because reverse mortgages can be an expensive loan option that doesn’t work for low-income home owners. Always research your options thoroughly before committing to a loan.