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DEFINITION: reverse mortgage
A special type of loan available to equity-rich, older owners. Repayment is not necessary until the borrower sells the property.
In a reverse mortgage, the payments are actually made in "reverse" --- the loan pays you.
The purpose of a reverse mortgage is to allow older homeowners the opportunity to use the equity in their property now, without having to sell the property to get access to that equity.
With a reverse mortgage, you obtain a loan. Then, the loan pays you in monthly installments, in a lump sum, or in other ways.
The loan is repaid when you die, sell the property or move out permanently.
Normally, the lenders require that you be age 62 to obtain a reverse mortgage.
The U. S. Department of Housing and Urban Development has information on their website here: HUD Reverse Mortgage Information
A reverse mortgage is not for everyone, and there are ramifications of obtaining a reverse mortgage. Get counsel, seek professional advice, before making a binding decision.
For additional information, please contact a lender. If we can help you with reverse mortgage information, please Contact Us.
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