Reverse Mortgages
Refinance

Reverse Mortgages

by Amy Lillard

As the numbers of people reaching retirement age are increasing, a new kind of mortgage has been created. The newest rage in the mortgage business is called a reverse mortgage. A "reverse" mortgage is a special type of loan against your home that you do not have to pay back until you die, sell your home, or permanently move out of your home. With a reverse mortgage, you can turn the equity of your home into cash without having to repay the loan each month. This type of mortgage gives older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more. The cash you get from a reverse mortgage can be paid to you in several ways:

> all at once, in a single lump sum of cash
> regular monthly cash advance
> "creditline" account in which you make withdrawals
> combination of these payment methods Refinance at Today's Low Rates!

To be eligible for most reverse mortgages, you must own your home free and clear and be at least 62 years old. However, you do not need an income to qualify for a reverse mortgage since reverse mortgages require no repayment.

The Difference between "Forward" Mortgages and "Reverse" Mortgages

A forward mortgage is what's used to typically purchase a home. You borrower money from a lender and you make payments every month to that lender for the debt. As years pass, your debt decreases as you make more payments and your home equity (ownership value) increases.

Reverse mortgage is just the opposite. When you take a reverse mortgage, your debt increases and your ownership value decreases. With a reverse mortgage, the lender sends you cash, and you make no repayments. So the amount you owe (your debt) gets larger as you get more and more cash and more interest is added to your loan balance. As your debt grows, your equity shrinks, unless your home's value is growing at a high rate. When a reverse mortgage becomes due and payable, you may owe a lot of money and your equity may be very small. If you have the loan for a long time, or if your home's value decreases, there may not be any equity left at the end of the loan.

The Highlights of Reverse Mortgages:
> Income Increases
> Tax Free Money
> No Income Requirements
> No Major Credit Requirements
> No Health Requirements
> Social Security Income Or Medicare Benefits Are Not Affected