A Reverse Mortgage
A Reverse Mortgage is a loan available to seniors (62 and over) that is used to release the home equity in the property as one lump sum or multiple payments. The homeowner'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). A reverse mortgage enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free income without having to sell their home, give up title to it, or make monthly mortgage payments. There are no income, health, or credit qualifications and the loan only become due and payable when the last borrower permanently leaves the home. A reverse mortgage is a non-recourse loan, which means that neither the borrower nor the heir can ever owe more than the current market value of the property when the loan becomes due. No assets other than the house will be used to repay the loan and any equity remaining after repayment belongs to the borrower or heirs.

According to HUD, the federal agency that insurse reverse mortgages, seniors have the following payment options...

Tenure - borrower receives equal monthly payments for as long as at least one borrower occupies the property as a primary residence.

Term - borrower receives equal monthly payments for a fixed period of months after which time there will be no monthly payments.

Line of Credit - the borrower can access their funds at times and amounts of their choosing until the line of credit is exhausted. Un-drawn money earns interest and increases the line available.

Lump Sum - the borrower can receive a one-time distribution of proceeds.
Combination of the above.

Most seniors are recognizing that traditional retirement tools, such as IRAs, pensions and 401Kk)s are not providing sufficient income to help fund everyday living expenses and health care. Reverse mortgages provide the extra dollars that allow seniors to stay securely in their homes throughout retirement, help pay for home repairs and improvements, give gifts to their children, grandchildren, or favorite charities, or to fund education. For others, the funds from a reverse are being used to pay taxes, support health care needs such as prescription drugs and medical care, including care at home or to purchase long-term care insurance.

More Info About A Reverse Mortgage:

-The History of the Reverse Mortgage
- How a Reverse Mortgage Can Help the Baby Boomers
- The Benefits of Using a Reverse Mortgage