Note: This section applies to you if you are age 62 or older.
A reverse mortgage or reverse annuity mortgage allows you to receive a stream of monthly payments or have a line of credit from a mortgage company. This option allows cash-strapped elderly homeowners the opportunity to use some or all of the equity in their homes while they are alive.
How It Works
The bank uses your home as collateral and makes monthly payments to you or establishes a line of credit that you can draw upon. The payments to you are based on your age, the home's value, interest rates, and your marital status. Unlike a conventional loan, you don't have to make payments to the bank. Principal, interest, and fees simply accrue against the home's value and are paid when you sell your home.
Generally to qualify for a reverse mortgage:
IMPORTANT NOTE: Extreme caution should be exercised before a reverse mortgage is implemented. Consider the following:
See the section on Reverse Mortgages for more information.