What is a Reverse Mortgage?

Reverse Mortgages were created specifically for Senior Homeowners who own their home outright, or owe little on it. These Seniors may use the extra cash for living expenses - or to just improve the financial quality of their lives.

A Reverse Mortgage is a home loan for Seniors that does not have to be repaid for as long as they continue to live in their home - a Reverse Mortgage is a home loan that requires no monthly mortgage payments - and, a Reverse Mortgage is a home loan that can be structured in a variety of ways.

For example, you can receive a lump sum of cash for any purpose. Or, you can obtain an available line-of-credit that lets you decide how much of your equity to use and when to use it. Or, you can receive monthly income for life - or for whatever term you decide. Or, you can choose any combination of these flexible cash-advance options.

For older Homeowners, a Reverse Mortgage can satisfy a variety of needs. You can use the money to payoff debts, deal with financial emergencies, travel, increase your monthly income, pay for home improvements, help your children or grandchildren, or establish a cash reserve for future needs. There are many Reverse Mortgage possibilities.

How Does A Reverse Mortgage Work?

A Reverse Mortgage is simply a home loan for Senior Homeowners. With your Reverse Mortgage, you the owner retain complete ownership and control of your home - just like with any other home loan.

With a Reverse Mortgage, the lender sends cash to you according to the plan you select. You make no monthly mortgage payments for as long as you live in your home. The more cash you receive, the greater the loan balance owed against the property.

A Reverse Mortgage is a non-recourse home loan. This means there is no personal liability to you or your Heirs, no matter what. The lender can only look to the property for repayment (FHA insures the lender against loss at repayment if the loan balance at that time exceeds the property value).

Also, FHA insures you, the Homeowner, against loss in case of lender default - both Homeowner and lender are insured against loss.

Repayment is due after all Homeowners permanently vacate the home (die, sell, or permanently move out). That repayment comes out of the equity, or by any other means chosen - your Heirs could refinance the home, or write a check, or sell the property.

Typically, the property is sold and the loan is repaid - any remaining equity belongs to you or your Heirs.