What is Reverse mortgage?

Question

In the recent budget speach - our respected FM-PC mentioned about the same.
Whether the Reverse mortgage has been started in India?
What is the difference between a Mortgage and a Reverse Mortgage?
Why it is called a Reverse Mortgage?

Answer 1

A reverse mortgage is a special mortgage designed to allow seniors over age 62 to access the equity in their home, without making payments, so they can stay in their home. Many seniors do not have the income to stay in their homes. They also have to be basically be broke to qualify for Medicaid. A reverse mortgage allows seniors to have income so they can continue to stay in their home even if they are on Medicaid. The National Council on Aging calls this "Using Your Home to Stay at Home". Sometimes it is also refered to as "Aging in Place", versus in a Nursing Home. Basically, with a reverse mortgage the bank pays you versus you paying the bank. The balance is due once the borrower passes the property to their estate (they die) or they permanently move out of the home (Nursing Home). Reverse mortgages are the most regulated loan product in the country to protect seniors. It is called a reverse mortgage as it works the opposite of a forward, or traditional mortgage. With a forward mortgage you start with a large balance and low equity and reduce the balance over time. With a reverse mortgage you start with a low balance and high equity and and increase the balance over time. Reverse mortgages are greatly misunderstood. The #1 myth is that the bank takes your house. A reverse mortgage just a loan as any other loan and the bank never wants your house. You just pay off the loan when you sell the house, just as you pay off your normal mortgage when you sell your house.

Answer 2

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Answer 3

A reverse mortgage is when the bank pays you and buys back your property. I do not know the exact terms and I suspect that the terms are not that favorable to the homeowner except that they get to stay in the house while this happens. I suspect that there are ploys to extract the money that is being paid to the homeowner, basically forcing that homeowner to do things like, carry insurance, whether they could afford it or not, upgrade the poroprty , whether it really needed that right now or not etc. So I think basically a reverse mortgage should be a last resort of a homeowner when they do not want to leave their property. I would suggest just selling the property if they can afford to move elsewhere. It is tough getting old.

Answer 4

Reverse mortgage as has been stated by Fm in his budget speech recently is to be made available for Senior citizens for which National Housing Board is asked to look into. Reverse mortgage is different from mortgage in the respect that in it banks mortgage the residential property and pay EMI over a period of 15 years allowing the person to continue to live. After expiry of the terms, he can pay back the money received with interest to bank and get back his house otherwise bank will evaluate and sell his house and refund the sums after deducting their dues to the person.

Answer 5

A reverse mortgage is where you receive a stream of income based on your equity in the property. It allows you to live in the property and receive cash flow without selling the home.

Answer 6

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Reverse mortgages are a special type of home loan that lets a homeowner convert the equity in his/her home into cash. They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more.

Answer 7

A reverse mortgage is a home loan that provides cash payments based on home equity. Homeowners normally "defer payment of the loan until they die, sell, or move out of the home."

Answer 8

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