What is a reverse mortgage?
A reverse mortgage is a loan that enables the home owners to exchange a portion of their home equity into cash. To be eligible, the homeowners must be 62 years old or older and own most of their primary residence.
What are the advantages of a reverse mortgage?
• The borrower does not need to make monthly payments toward their loan balance
• The additional money can be used for living expenses, debt repayment, healthcare expenses, and more
• Non-borrowing spouses not listed on the mortgage can remain in the home after the borrower dies
What are the disadvantages of a reverse mortgage?
• The borrower must maintain the house and pay property taxes and homeowners insurance
• A reverse mortgage forces you to borrow against the equity in your home
• The fees and other closing costs associated with a reverse mortgage can be high
What are your other options besides reverse mortgage?
If you are considering a reverse mortgage, selling your home and downsizing is an option. Talk with your lender to explore all of your options.
If you’d like to know the current value of your home, check out our free home evaluation tool: