Reverse Mortgages
Just as the name implies, payments on a reverse mortgage are reversed -
the lender actually pays your mortgage payment each month! Reverse
mortgages are only available to homeowners over the age of 62, and the
amount of money you'll receive each month varies depending on your age
and the amount of equity you have in your home. In some cases, you may
be eligible to receive a check each month in addition to the payments
made on your mortgage.
As the reverse mortgage pays your payment each month, the amount of the
payment plus interest is added to the balance owed on the loan. If you
choose to sell your home, you can pay off the balance owed and any
remaining funds (home equity) will go back to the you, just like a
typical mortgage.
Some reverse mortgages are federally insured. Insured reverse mortgages
are guaranteed to pay the borrowers' mortgage for as long as you live in
and own the home. In the event the amount of the payments exceeds the
value of the home and the reverse mortgage is insured, the borrower will
not be held responsible for any loss the lender incurs.
