can you explain a reverse mortgage?

Answer 1

A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:

all at once, in a single lump sum of cash;
as a regular monthly cash advance;
as a "creditline" account that lets you decide when and how much of your available cash is paid to you; or
as a combination of these payment methods.

No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older.

Answer 2

A reverse mortgage (known as lifetime mortgage in the UK) is a loan available to seniors (62 and over in the US), and is used to release the home equity in the property as one lump sum or multiple payments. The home owner's obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (i.e. into aged care).[1].

In a typical mortgage the home owner makes a monthly amortized payment to the lender; after each payment the equity increases within their property, and typically after 30 years the mortgage is paid in full and the property is released from the lender. In a reverse mortgage, the home owner makes no payments and all interest is added to the lien on the property. If the owner receives monthly payments, then the debt on the property increases each month.

If a property has increased in value after a reverse mortgage is taken out, it is possible to acquire a second (or third) reverse mortgage over the increased equity in the home. But in certain countries (i.e. US), a reverse mortgage must be the first and only mortgage on the property.

Answer 3

First consider what a normal mortgage does. You borrow money from a lender, secured by the property, and pay this principal back over time (along with interest). At the end of the loan term you own the home.

In a reverse mortgage, you give up interest in your home to the lender, and they pay you periodic payments over time. At the end of the loan term, they own the home.

It's typically used in situations where an elderly borrower owns a home but doesn't have liquid cash on hand, and doesn't choose to leave the home to an heir.

In this case, the lender provides a regular income stream to the borrower, and the borrower figures they'll die before the end of the term of the loan and thus the house just reverts back to the lender.

Best to you.

Answer 4

A reverse mortgage is a government insured loan, that allows you to get the equity out of your home and turn it into cash - all with NO monthly mortgage payment to make ever. You must be at least 62 years of age.

Answer 5

Say you own a $250,000 home. You are most probably retired and want to go somewhere like Paris-you get money out of the mortgage you have already paid into. This also works for illness of any kind. Even Aids. You can call your bank and see if they have brochures

Answer 6

if i do reverse mortgage but i have my son on my will he will pay back all the money was giving to right ?

Answer 7

http://www.reversemortgage.org/