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What is a reverse mortgage?
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10th Dec 2009 by Daniel Cross, ChFC
A reverse mortgage is an option available to seniors who have paid off, or nearly paid off their home and do not plan on moving. They use their house as collateral for what is essentially an annuity which gives them a monthly income and debt is added into the "loan" on the property. This debt obligation doesn't need to be paid until they die, or move in which case they would need to pay whatever the loan amount had accumulated to that point. If they die, the loan balance is paid by heirs, or upon sale of the property where the proceeds would go to pay back the loan.
A reverse mortgage is an option available to seniors who have paid off, or nearly paid off their home and do not plan on moving. They use their house as collateral for what is essentially an annuity which gives them a monthly income and debt is added into the "loan" on the property. This debt obligation doesn't need to be paid until they die, or move in which case they would need to pay whatever the loan amount had accumulated to that point. If they die, the loan balance is paid by heirs, or upon sale of the property where the proceeds would go to pay back the loan.
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10th Dec 2009 In Finance
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Subjects: reverse mortgage,