Overview

Reverse mortgages are becoming a popular tool for seniors to solidify their financial footing. Although they were first developed during the 1980’s, their acceptance has been increasing in the last few years, as more and more seniors are faced with increasing costs in all aspects of their lives. We’ll be the first to tell you that reverse mortgages are not for everyone. A key requirement for considering a reverse mortgage is your desire to stay in your house for a considerable period of time. Whether you want the security of a credit line, need money for a health care issue, or simply want more freedom to enjoy your retirement, a reverse mortgage is worth considering.

A reverse mortgage operates in a reverse fashion of the standard mortgage that you know. When a reverse mortgage is signed, you take out a loan against the appraised value of your home and the lender pays you a lump sum, monthly payments, or provides a monthly credit line - all tax-free. Where traditional mortgages are considered “rising equity and falling debt,” reverse mortgages can be considered “falling equity and rising debt.” The debt in this case is the value of your home plus interest associated with the loan. However, the loan is not paid back to the lender until you have to move out of your house or upon your death. You can live in your house for the rest of your life and not have to be worried about making any type of mortgage payment; in a sense you actually get paid to live in your house by utilizing the equity that you have accumulated through the years. As long as you take care of your house, you can have the best of both worlds – access to your home’s equity and the continued affordability of your home.

You may ask, “What happens if I have to move or I pass away?” The loan against your house comes due, and you or your heirs get to keep the difference between the loan amount and the selling price. If your home is your only asset, this result is a consideration for you. There is no guarantee that your home’s value will continue to appreciate but at the same time, if its value happens to decrease, you do not have to make up the difference. You will never owe anything as a result of taking a reverse mortgage. We have answers to many other questions in our FAQ area.

Reverse mortgages are becoming increasingly popular for many reasons. Continue through this site to learn more or contact us directly to discuss your immediate questions. Together we can discover if this loan program would be a good option for you, a family member or loved one.