Are you Elderly (Over 62 years of Age)? Are you considering selling your home to get the money necessary to survive in your retirement? The Reverse Mortgage (RM) may be a great alternative. The RM was designed to enable older retired homeowners who are likely to be on fixed income to use the equity in their homes (Most likely totally paid for) as a source of supplemental income while still retaining ownership. The RM program is available to homeowners who are 62 years of age, who own their home free and clear or nearly so and who wish to use the equity in their homes to cover part or all of their living expenses after retirement.
The way the RM works is like this, a lender has the home appraised and then lends a certain percentage of the current value. The loan itself is paid to the homeowner in a number of different ways, mostly in either one lump sum or in the form of a monthly payment. Throughout the term of the loan, the homeowner owns and lives in the home.
The lender's security for the RM is the same as a conventional mortgage, the home itself. If the homeowner (or owners) dies before the term ends, the estate is liable for the debt. Of course, if the house is sold prior to any death, the debt must be paid off. If, when the loan comes to term, and the homeowner (or owners) is still alive, a new RM can be created, assuming that the property has increased in value.