What is a Reverse Mortgage?

A Reverse Mortgage let’s you convert part of the equity in your home into cash without selling your house or making monthly mortgage payments, and you can live in the home as long as you meet the loan obligations.

Instead of putting money into your house by making monthly mortgage payments as in traditional mortgage, you can take money out of your home’s equity, that is why it is called a reverse mortgage. Similar to a Heloc or cash out refinance, you can choose a lump sum disbursement , monthly payments or establish a line of credit or a combination of these .

To qualify, you typically need to be 62 years old or older , own the home, live in it as your primary residence and undergo a financial evaluation , you also need to pay property taxes and homeowner’s insurance and maintain the property, just like with a traditional mortgage.

The bank doesn’t own your home , you maintain ownership and as long as the loan obligations are met, the bank can’t take possession of your house . Your heirs will never inherit a debt, they may pay off the loan and keep the house, or sell the house and keep the profit , but they are not personally responsible for the debt if the house depreciate in value.

With a reverse mortgage you are in charge, you are free to spend the money in any which way you like; to cover medical and long term care expenses, payoff an existing mortgage, fund grand children education, or travel.