Reverse Mortgage Information | What is a Reverse Mortgage
What is a Reverse Mortgage
A lot of people have been watching the commercials on TV and asking themselves or their neighbors - What is a Reverse Mortgage? I am writing this article to bring together all the basic information on the internet about what is a reverse mortgage and who it's meant for.
I always recommend that people read as much as possible and do as much research as they can before getting into any big decision and a reverse mortgage certainly is a big decision.
Remember, this article is about the BASICS of reverse mortgages. Once you understand these basics, I would encourage you to learn more about this financial instrument before plunging in head first.
So back to the question at hand - What is A Reverse Mortgage ?
Well, a reverse mortgage is something akin to a 2nd mortgage but it is primarily meant for senior citizens. A reverse mortgage is a loan that is paid back by the estate of the senior citizen after they have passed on (or they sell the home and move away)
More Reverse Mortgage Information
A reverse mortgage is primarily meant for senior citizens. Currently the age, I believe is 62 and older. If a senior citizen is running out of their nest egg or has suffered badly in the recent financial crisis, they can opt for a reverse mortgage but before they do so, it is recommended that they get as much reverse mortgage information as the possibly can. Reverse mortgage information can be obtained on the internet or by visiting your local financial advisor.
Remember, a reverse mortgage is basically a way for a senior citizen to get the equity out of their homes to use as personal every day expenses. So you can borrow against the equity in your home and you do not need to pay anything back as long as you are still living in your house. If the original borrower were to pass away or sell the home and move out, they (or their estate) would have to pay back the loan.
If there is any equity remaining in the home, it would belong to the heirs. If the value of the home drops between the time the loan was taken and the borrower passed away, then the estate or the heirs will not be responsible for paying off more than the home's current value. So if you are afraid that your home's market value will fall and the size of your estate will not be enough to pay back the loan, you don't have to fear. Talk to a personal financial advisory.
To Sum Up the Reverse Mortgage Information
- A Reverse Mortgage allows you to borrow against the equity in your home.
- You do not have to pay it back as long as you live in your house.
- It is for senior citizens
- When you pass on or move out, you or your estate/heirs will be responsible for paying off the reverse mortgage but never more than the home's current market value at that time
- It is a great deal for some people but not for others so learn as much as you can about it
I don't think you will be asking anyone - what is a reverse mortgage after reading this short article. But you should still do your research as their are other specific rules and regulations beyond the scope of this piece. So get as much reverse mortgage information as you possibly can.