Reversed mortgages began as an act of charitable kindness when Nelson Haynes of Deering Savings & Loan of Portland, Maine wrote a reverse mortgage for the widow of his high school coach. Although they are no longer a charitable act, they do offer seniors independence and dignity if they need money. If you're 62 years of age or older and need money to supplement your income or pay for expenses, you may want to consider a reverse mortgage. A reversed mortgage is a loan aganst gainst the equity of your house. However, unlike traditional mortgages. second mortgages, or home equity loans, you don't have to meet income guidelines or pay the loan back as long as it's your primary residence. Furthermore, the loan will never cost more than the value of the house. Consequently if you sell the house, you repay the cash you borrowed, interest, and any fees at that time. If you die, your estate has up to one year to repay the mortgage. If there is anything left, the remainder belongs to you or your estate.

The amount you can borrow is dependant upon the borrower's age, the current interest rate, the appraised value of your home, projected appreciations, and other factors.. Under the Housing and Economic Recovery Act of 2008, the limit for federally insured reversed mortgages is $417,000. Before this act, lending limits were based on home values in the area.

To qualify for a reversed mortgage, you must meet four standards:

• You must be 62 years of age or older.
• You must live in the house as your primary residence.
• The house must be in good structural condition without any major defects or problems.
• The house must be paid off or remaining balance is small enough it can be paid off with a small portion of the funds from a reverse mortgage.

Unfortunately, you do not recieve the money borrowed against the equity in one lump sum. However, there are five different ways you can recieve the money as long as it is your primary residence.

• A lump sum
• Equal monthly payments for as long as the owner resides in the home
• Equal monthly payments for a fixed time
• Unscheduled payments until the line of credit is exhausted
• A combination of monthly payments as long as you live in the home and a line a credit
• A combination of monthly payments for a fixed period combined with a line credit.

If you're 62 or older and you need money, a reversed mortgage may be beneficial. The funds can be used for anything you wish whether it's paying bills, supplementing your retirement, or home improvements. Furthermore, the proceeds from your house are tax-free and they can be recieved a variety of ways. However, before you sign on the dotted line, remember, there are reversed mortgage scams. Therefore, thoroughly research this subject before committing yourself.