How Do Reverse Mortgages Work? – The Ultimate Guide
If you’re getting near retirement age you may have come across this financial product. Just about everyone asks the same question, just how do reverse mortgages work? They continue to grow in popularity and the basics are relatively simple.
A reverse mortgage is designed for senior adults getting near retirement or already retired. Its similar to a conventional mortgage in one respect – it allows you to borrow against the equity that you have in your personal residence.
However, unlike a traditional mortgage where you are required to make monthly payments of principal and interest to repay the loan, with a reverse mortgage, you don’t. As long as you live in the home, none of the mortgages has to be repaid. Not until you sell the home, or it is no longer your personal residence, or the last borrower dies, is the loan repaid.
This program is administered by the FHA and does have certain conditions that must be met.
From a financial perspective, how do reverse mortgages work?
A reverse mortgage does differ from a conventional mortgage or a home equity loan. The latter two View full post…