Reverse Mortgage

If you watch television, you have probably heard of a reverse mortgage but you may not be quite sure what a reverse mortgage is and how it works. Stately simply, a reverse mortgage is a mortgage loan that is available to homeowners who are 62 years of age or older and who have equity in their home. The way it works is the homeowner/borrower gives the lender a lien against their primary residence and the lender pays the homeowner/borrower money for doing so. The homeowner/borrower does not have to have a good credit score, does not have to have a job, income or even any assets. It sounds too good to be true, but in this case it is absolutely true. In the most common form of a reverse mortgage, the borrower can take out a lump sum, receive monthly payments or get a line of credit or a combination of monthly payments and a line of credit.

Some key characteristics of a reverse mortgage are:

• The borrower does not have to pay back the loan for as long as they live in their home.
• The borrower is not personally liable to repay the loan.
• The borrower cannot owe more than the home is worth when the loan becomes due.

Please see my articles on reverse mortgages for more information.