A reverse mortgage loan, like a traditional mortgage, allows homeowners age 55+ to borrow money using their home as security for the loan. Also like a traditional mortgage, when you take out a reverse mortgage loan, the title to your home remains in your name. However, unlike a traditional mortgage, with a reverse mortgage loan, borrowers don’t make monthly mortgage principal and interest payments.
Interest and fees are added to the loan balance each month and the balance grows. Homeowners are required to pay property taxes and homeowners insurance, use the property as their principal residence, and maintain the property.
The loan is repaid when the borrower no longer lives in the home. If the borrower sells the home the reverse mortgage is paid off from the proceeds, the same as a traditional mortgage.
An amazing feature of a reverse mortgage is that the homeowner(s)/borrower(s) can remain in the property for their entire life, even if the reverse mortgage loan balance grows beyond the value of the home. The reverse mortgage is a no-recourse loan. At death the homeowner(s)/borrower(s) heirs can sell the home, pay off the reverse mortgage, and receive the proceeds as an inheritance after the reverse mortgage is paid off. If however the value of the home is less than the reverse mortgage balance at the demise of the homeowner(s)/borrower(s), the heirs are not liable for any of that shortfall.
Request our free e-book "Reverse Mortgages 10 Life-Changing Benefits A Financial Planning Guide" to learn more about this amazing product. Today's reverse mortgages are being used to;
-eliminate mortgage payments for American's aged 55+
-supplement monthly income/delay social security
-compliment a retirement portfolio to both increase returns and reduce risk
-create a liquid, tax-free and FHA-insured fund that grows at a rate 2-3X higher than money market
-eliminate credit card, car loan and other debt payments
-pay for long-term-care insurance or provide the funds necessary to self-fund long term care
-provide funds for home improvements or modifications
-provide funds to enhance retirement: vacation home, bot, RV, travel etc...
-access home equity to benefit children and grandchildren in the present, instead of after you're gone
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