A reverse mortgage is when you tap into your home’s equity and receive monthly payments from a lender. Reverse mortgages are usually granted to retired or older people to help them make ends meet. The reverse mortgage must be repaid upon the death of the homeowner or when the home is sold. A reverse mortgage is also known as a home equity conversion mortgage or HECM. For more related stories click on the related articles listed below.
The idea behind a reverse mortgage is to allow seniors age 62 and older to tap into the equity they have built up in their homes to augment their income or make necessary repairs to their home. You can either get the cash in a lump sum, or as a home equity line of credit, where you can write a check as need be, or as a stream of income.
Many seniors are living only on social security and each month are worried that they'll run out of cash before their next social security check arrives. Your retirement years shouldn't be the time that you wonder whether you can make it financially. Tapping into the equity of your home can help support you financially during your retirement years.
Reverse mortgages or HECM's have become a booming business. They allow seniors to get cash out of their homes. To get the most out of a HECM, you need to capitalize on interest rates and home values. The money from an HECM is available in lump sum, monthly payments or a home equity loan or line of credit.
If your neighbor has a reverse mortgage, can she and her mortgage lender be held responsible for criminal activity at the home? With a reverse mortgage or hecm, the mortgage lender pays the homeowner over time and the the lender is repaid when the home is sold. But even though the mortgage lender holds a lien on the home, it couldn't be held responsible for the criminal activity. The only one liable is the homeowner. But before a neighbor files a lawsuit, he should contact his local police department.
When you're in retirement you want a consistent, stable flow of income such as from a certificate of deposit. What should you do if your CD's rate of return can't match the income you need? You could move the money into a Roth IRA. But changing over to a Roth IRA may cause funds to be taxed at a higher amount than what would otherwise be paid on a year to year basis. Another alternative is a reverse mortgage.
Reverse mortgages are often a good option for seniors who live on a fixed income. There are two kinds of reverse mortgages - one from HUD and the other from Fannie Mae. You should only use a reverse mortgage lender who is legitimate and watch out for scams. There are several websites and books that offer a wealth of information on how to pick the right reverse mortgage lender.
A reverse mortgage can be a good option for seniors on a fixed income. A reverse mortgage allows a home owner over age 62 to use his home's value to get a loan in a lump sum or monthly payments. The home owner doesn't pay anything back on the reverse mortgage until he moves out or sells it. Several book and websites offer information on reverse mortgages and mortgage lenders.
Is a reverse mortgage right for you? Ilyce says if you're a home owner over age 62, you can cash in on a reverse mortgage which is a lot like a home equity loan. The amount of cash you receive depends on your age, where you live and your home's value. She offers tips on where to find information on reverse mortgages.