A reverse mortgage is loan that enables home owners to convert part of the equity in their home into cash. You can access your money in the form of a lump sum or periodic payments, straight from your home equity without having to sell your home!
Traditional refinance mortgages allow homeowners to take equity out in the form of a line of credit or cash, but they do have repayment obligations. In the case of a home equity line of credit you’re required to pay a minimum interest payment and with a traditional mortgage you would make a regular monthly payment of principal and interest.
The good news is, with a reverse mortgage, there are no payments due. The interest accrues and the loan principal plus interest is paid out either when the home sells or the last remaining owner passes away.
Sounds good right? Well let’s see who can get approved for a reverse mortgage…
