Loans

Reverse Mortgages

What is a reverse mortgage?

A reverse mortgage is a way for people aged 62 and older who have significant home equity to be able to pull out this equity in the form of a mortgage, where the bank actually pays the home owner either a lump sum, or monthly checks, or a line of credit, for the amount of equity that the homeowner wishes. There are significant fees in order to do this—usually 10% of the value of the home. It allows retirees to pull out equity in their home without having to incur a home equity loan, which allows them to get additional income. The reverse mortgage is then paid off when the home is finally sold. The reverse mortgage also incurs interest fees, which are also paid back when the home is sold.



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