What is a reverse mortgage?
A. A reverse mortgage is a special type of home loan which allows the homeowner to use the equity of his or her home and convert it into cash. No repayment is required until the borrower no longer lives in the home as their principal residence. The most popular reverse mortgage on the market today is the FHA HECM (Home Equity Conversion Mortgage) which is federally insured by the government.
A reverse mortgage (RM) is a a method for helping house-rich, cash-poor unlock their equity and convert it into income without having to sell their homes. Unlike an equity loan, which requires a borrower to make monthly payments, a reverse mortgage borrower receives payments from a lender. Because borrowers do not make monthly payments, they cannot default on a RM. Foreclosures are impossible by definition, they are strictly prohibited.
A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their equity into a tax-free income – without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower(s) permanently leaves the home.
A Reverse Mortgage is a type of mortgage that enables you, as a senior home owner, to tap into the equity you have in your home. Whether you need a lump sum to take a vacation or a stream of regular advances to supplement your monthly income, a Reverse Mortgage offers a payment option to address your particular financial needs. With a Reverse Mortgage, you will receive proceeds based on the value of your home. There are many different payment plans available. Payment plans are able to be changed at any time over the life of the loan, for a nominal fee. Unlike traditional mortgages or home equity loans, no repayment of the Reverse Mortgage loan is required until you no longer occupy the home as your principle residence.
