Overview of a Reverse Mortgage
The Reverse Mortgage is a loan secured against the value of your home. It lets you unlock some of the value of your home without selling and having to move. You must be 55 years or older and own your home to qualify.
Reasons to Consider a Reverse Mortgage
The reason(s) for considering a Reverse Mortgage is that the money you receive is actual equity in your home and is tax free because it is not considered income. You may arrange to receive these funds in a lump sum or periodic advances. There are no monthly payments to be paid. The mortgage is due to be paid in full should you sell your home. The money received from this mortgage can be used in any manner you so desire should you have some debts to pay off, or wish to do some home improvements or take that special trip or just to improve your day to day living. A Reverse mortgage can be paid in full at any time without penalty.
Disadvantages of a Reverse Mortgage
The rising loan balance can potentially and eventually grow to exceed the value of the home. This could be particularly alarming in times of declining home values. However, the borrower (or the borrower’s estate) is generally not required to repay any additional loan balance in excess of the value of the home.