Are Senior Reverse Mortgages a Good Idea?
What is a Senior Reverse Mortgage? This is simply a type of loan that allows older people to use their home equity in order to raise cash to help them supplement their incomes. Normally, the home must be paid off or almost paid off, and the borrower must be age 62 or older. These transactions are called senior reverse mortgages. Basically, the borrower takes out a loan against part of their existing home equity. The equity would be the difference between the appraised home value and the remaining mortgage balance. As with any loan, there may be interest, origination fees, etc. In addition, the borrower must still continue to pay for taxes, home insurance, and repairs. That is why the transaction will allow the borrower to use some, but not all, of their existing home equity. How Is The Money Paid To The Borrower? The borrower may also have some flexibility in the way they can get their payments. They may choose to take a lump sum, periodic payments, or a line of credit. The reason why
