A reverse mortgage is a mortgage that allows senior homeowners to access the equity in their home without qualifying or having to make regular monthly payments. Based on their age, the value of their home and current interest rates, a certain percentage of their home value is available to them. This equity can be accessed as a lump sum, a line of credit or a monthly payment paid to the homeowner.
With forward mortgages, payments are made by the borrower and the balance owed slowly decreases. With a reverse mortgage, no payments are made by the borrower. The accruing interest, plus a monthly service charge and a monthly MIP premium is added to the growing balance. No repayment of the loan is made as long as one of the borrowers is alive and living in the home.
Upcoming FAQ are:
- What is the purpose of a Reverse Mortgage?
- How can I qualify for a Reverse Mortgage?
- What can I do with the Money?
- How can I receive the proceeds?
- Will me Reverse Mortgage effect my Social Security or Medicare Benefits?
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