Reverse Mortgage

What is a reverse mortgage? 

A reverse mortgage is a type of loan that allows older homeowners to borrow money using the equity in their homes as security. These funds can typically be accessed as a regular income stream, a line of credit, lump sum, or a combination of all. 

How does a reverse mortgage work? 

Suppose you're a retired homeowner who owns the home outright and wants some extra money for retirement. You apply for a reverse mortgage and qualify to receive $1000 every month from the reverse mortgage (over 10 years, you get a total of $120,000). 

While living in the home, you won’t need to pay back the money, however interest will accrue over time. When you decide to sell your home, the loan must be repaid back to the lender. 

Who qualifies for a reverse mortgage? 

In most cases, people who are over 60 years old with a home they own outright can qualify for a reverse mortgage. However, not all lenders offer this type of loan.