what is a reverse morgage?

Answer 1

The reverse mortgage program is a federally regulated program. The youngest person on the deed must be 62 years of age. It cannot be a mobile home. The house is inspected and appraised.

The person or persons receiving the benefit of the reverse mortgage do not get the full value of the house. The amount one gets is based on the age of the borrower and the appraised value of the home. It presupposes you may live to be 100.

If any structural problems are discoverd at time of inspection, then a portion of the funds can be earmarked to have the necessary repairs made. The remainder of the money remains in an account from which the homeowner can draw a monthly income or have available as a line of credit to use as needed. The money can be used for anything. It is a line of credit and is like money in the bank. It is simply repaid out of the proceeds of the sale of the home, when the owner dies, or is unable to live in the home for more than one year.

The money that is withdrawn from that account is owed back with interest, and the money that is left in the account draws interest until it is withdrawn. You can get a reverse mortgage regardless of what your annual income may be. You need to own the house free and clear or pay off any debts against the home with the proceeds from the reverse mortgage.

If was one of the nicer inventions the federal government has come up with. It allows senior citizens, who sometimes have trouble finding financing for home repairs, etc. There is no need for grandma and grandpa to live in a house that is falling down around their ears anymore.

The AARP website has a lot more info, if you are interested.

Answer 2

A reverse mortgage is a loan against your home that requires no repayment for as long as you live there. Usually all the owners must be 64 years old, it must be your principle residence of at least 6 months, if you have any debt against your home, you must either pay it off before getting a reverse mortgage or (this is what most borrowers do) use an immediate cash advance from the reverse mortgage to pay it off. If you don't pay off the debt beforehand, or do not qualify for a large enough immediate cash advance to do so, you cannot get a reverse mortgage.

Answer 3

It's when you have enough equity in your house, you can have the bank pay you instead of you paying the bank.

There's lots of catches and considerations, however, ....

{{sorry, getting interrupted by trick or treaters tonight!}}

The catches are, you basically sign the property over to the bank. If you ever want to move out of the house, you have to repay the bank what they've paid you, plus perhaps some interest or penalty. Also, even if you live in the house forever, when your heirs sell the house, they will have to pay the bank back too.

Check into it carefully to make sure you know all the restrictions and conditions before you go into it.

On the other hand, if you are not planning on moving for the rest of your life (i.e., you're a senior citizen for example) and are on a fixed income, it can be a good deal for you.

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Answer 4

Lets say that you are house rich and cash poor- Like if your house is already paid off but you are flat broke. You essentally get monthly payments from the bank over the next 30 years which are held against your house, by which you could refinance or sell the house at any point.

Answer 5

You are pulling the equity out of your home and actually receiving payments every month.

Answer 6

It's a bank loan against your house that you do not have to pay back. You have to be a senior citizen though.

Answer 7

reverse mortgage is good if you think you will outlive your equity on the home, and you dont plan to pass your home to your heirs.

Answer 8

It's a scam I can not belive it is a option