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What is a Reverse Mortgage? For many seniors, their homes are their biggest financial asset. By unlocking home equity, many more homeowners may be able to afford services and supports they need. Today, thanks to a special program known as a Reverse Mortgage, you can use your home as a tool that can allow you to continue living an independent, secure life.
A Reverse Mortgage is a specialty home loan that allows homeowners 62 years and older the ability to convert a portion of their home equity into a tax-free income stream without selling the home, giving up the title, or taking on additional mortgage payments. Instead of making monthly payments to the lender, as with a regular mortgage, payments are made by the lender to you. Repayment is due after all owners permanently vacate the home, and is paid out of the proceeds of the sale or refinance of the home. The amount paid back is total of amount used and accrued interest on that amount.
A Reverse Mortgage is called a non-recourse loan. The Federal government guarantees all reverse mortgages, and the lender can only look to the value of the home at the time you no longer occupy your home to satisfy the loan balance. This means there is no personal liability for you or your heirs should you owe more than your house is worth at the time the repayment of the loan is due.
The money you receive through a reverse mortgage can be used for any purpose- whether it's day to day living expenses, home remodeling or repairs, paying off an existing mortgage, or traveling the world. The choice is yours. But best of all, you retain the title and you remain living in your home as long as you choose
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