Reverse Mortgages

A Reverse Mortgage is a type of home equity loan that allows you to convert some of the equity in your home into cash while you retain home ownership. A Reverse Mortgage works much like traditional mortgages, only in reverse. Instead of making a monthly payment to your lender, the lender pays you. You do not make any payments on your reverse equity loan when you are in it. Funds obtained from a Reverse Mortgage may be used for any purpose such as home improvement, vacation, a new car, or savings.

To qualify for an Reverse Mortgage, you must be at least 62 years old and own your home. There are no income or credit requirements for a reverse mortgage. Qualifying is based solely on your age and equity in your home. If you need to eliminate your current mortgage payment, take cash out of your home, pay off other existing debt, or all three, and would like to be able to do so without having a mortgage payment, then a reverse mortgage may be just what you need.

The Reverse Mortgage funds may be paid to you in a lump sum, in monthly advances, through a line-of-credit, or in a combination of the three, depending on the type of Reverse Mortgage. The amount you are eligible to borrow generally is based on your age, the equity in your home, and the interest rate.

Because you retain title to your home with a Reverse Mortgage, you also remain responsible for taxes, repairs, and maintenance. Depending on the plan you select, your Reverse Mortgage becomes due either when you permanently move, sell your home, die, or reach the end of the pre-selected loan term. The lender does not take title to your home when you die, but your heirs must pay off the loan. The debt is usually repaid by refinancing the loan into a forward mortgage (if the heirs are eligible) or by using the proceeds from the sale of your home. Again, the bank does not own your home, and has no desire to do so. Your home is left to your heirs, not the bank.