What Are Reverse Annuity Mortgages?
is a mortgage loan program designed specially for senior citizens. It allows them to borrow a certain amount against their home equity. The borrower receives monthly tax-free payments from the lender either in the form of periodic payments or from an annuity set up with the loan proceeds. The borrower does not have to repay the loan till he sells off the property or if he wishes to move over to another place. In case he dies, his heirs will have to repay the principal balance along with the interest. Reverse annuity mortgage is also known as reverse mortgage. The Home Equity Conversion Mortgage (HECM) is a special kind of reverse annuity mortgage approved by the US Department of Housing and Development (HUD).
