Reverse Equity Mortgages Explained

Reverse equity mortgages should not be confused with traditional "forward" home equity loans, equity lines of credit or 2nd mortgages. Home equity loans, equity lines of credit and 2nd mortgages need to be repaid on a monthly basis.

Reverse Home Mortgage

However reverse equity mortgages require no repayment until the house is sold or the homeowner no longer lives in the house.

The dwelling may be passed on in an estate after the loan is paid off if any equity remains.

Heirs do not owe more than the house is worth.

Proceeds from reverse equity mortgages can be distributed by a combination of methods.

1. Monthly increments
2. Lump sum payment
3. Line of credit

How the cash is used is up to the discretion of the homeowner. Since there are no restrictions, the money can be used to pay debts, remodel the house, finance a trip to France, taken as monthly income or tucked away in a bank account.

But remember, once reverse mortgage cash is gone... Well, that's the point. It's gone.

Dangers Of Reverse Mortgages

Care should be taken when considering the cost of a reverse home mortgage. Fees eat away at equity. So it is always prudent to get an up-front estimate of all charges before signing paperwork.

Seniors and those assisting should consult a financial planner, tax accountant and/or an attorney to evaluate their individual situation and the lender's contract.

Reverse home mortgage counseling is also highly recommended whether or not required by the home loan lender. It goes without saying that "buyer beware" is a fitting statement.

Cash Without Monthly Payments

Are you or do you know a Senior who would like more information about reverse equity mortgages? Visit What Is A Reverse Mortgage to learn more about receiving income without a monthly payment during your retirement years.

Now here's a unique thought as long as we are discussing income. Go here to find out how many Seniors are supplementing monthly income using their life experience... It's retirement time. Time to do life YOUR way!

Ask Kate About Reverse Equity Mortgages

I have been asked if homes with reverse mortgage financing can be taken away from the owner? You cannot outlive your mortgage neither can you or your heirs be required to pay back more than the house is worth after it is sold.

Do you have a question about a reverse home mortgage? Ask Kate is specifically designed to answer your questions and create dialog regarding mortgage financing. Every question is a good question.

P.S. It's worth saying again. Seniors should consult a financial planner, tax accountant and/or an attorney to evaluate their circumstances. Reverse mortgage counseling is highly recommended.

Return home to Get-Your-Best-Mortgage-Rate from Reverse Equity Mortgages

Help Spread The Word About Reverse Equity Mortgages

Please come back and visit often. Help me spread the word by sharing Reverse Equity Mortgages with your friends using these easy social networking buttons.