Reverse Mortgage Defined:

Introduced in the late 1980's, a reverse mortgage is a way to turn the equity you've built up in your home into tax free cash! With a reverse mortgage, you don't have to make any mortgage payments while you live in the home. It does not have to be paid back until you permenantly leave the home. It's a great tool for homeowners whose greatest asset is the equity they've built up in their home.

The money from a reverse mortgage can be used for anything. This includes home repairs, daily living expenses, covering debts, medical bills or for any other purpose you can think of. To be eligible for a reverse mortgage the youngest homeowner should be at least sixty-two years of age. You should have some equity in the home. The home must be a single family home, 2-4 unit property, townhouse or condo.

Reverse Mortgage Counseling:

It is a requirement for anyone applying for a reverse mortgage to get counseled by a HUD approved counselor. Since this is an independent third party counselor, this is in the best interest of the borrower. Through this counseling the potential borrower will become aware of the cost of borrowing. The counselor will also discuss possible alternative options to taking out a reverse mortgage. If you choose to go ahead with a reverse mortgage, funding can occur within just 3 weeks after the application.

How you Pay Back a Reverse Mortgage:

There are no payments due each month on the reverse mortgage while you live in the home. Infact, it does not have to be paid back until you leave the home. You will never owe more than the value of your home, and if the amount owed does exceed the value of the home the government or lender must cover that gap. You can repay the loan from the sale of your home or using private funds.