what is a reverse mortgage?

What is a Reverse Mortgage?  Understanding the pros and cons of HECM TV commercials label reverse mortgages simple fixes for elderly homeowners needing cash – a financial easy button. Sorry, there is no such thing. Yes, reverse mortgages can be attractive. Folks older.

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However, if the owner fails to pay insurance and property taxes, the reverse mortgage is deemed in default and the owner is in danger of foreclosure. Success, and failure. For many retirees, such as 73-year-old Robert Lee White of Fort Lauderdale, Fla., a reverse mortgage can be nothing short of a lifeline.

Reverse mortgages were once anathema to savvy financial planning. These loans-which let homeowners over age 62 pull equity out of their homes while still living in them-were viewed as a costly last.

Features of Reverse Mortgages With a reverse mortgage, the borrower always retains title or ownership of the home. The lender never, at any point, owns the home even after the last surviving spouse permanently vacates the property.

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What is a reverse mortgage? A reverse mortgage is a loan that’s taken out against the equity in your home and it’s unique in that it doesn’t require a monthly payment. The amount you borrow simply accumulates until you either move or pass away, at which point it can be paid off by selling the house or by drawing from other assets.

Reverse mortgages can use up the equity in your home, which means fewer assets for you and your heirs. Most reverse mortgages have something called a "non-recourse" clause. This means that you, or your estate, can’t owe more than the value of your home when the loan becomes due and the home is sold.

What is a Reverse Mortgage? A reverse mortgage is a loan for seniors age 62 and older. hecm reverse mortgage loans are insured by the Federal Housing Administration (FHA) 1 and allow homeowners to convert their home equity into cash with no monthly mortgage payments. 2

How Does a Reverse Mortgage Work. A reverse mortgage is a loan made by a lender to a homeowner using the home as security or collateral. With a traditional mortgage, the homeowner uses their income to pay down the debt over time.