Tuesday, December 9, 2008

Reverse Mortgage

What is a reverse mortgage? Reverse mortgages were created specifically for senior homeowners who own their home outright, or owe little on it. These seniors may use the extra cash for living expenses - or to just improve the financial quality of their lives. For older homeowners, a reverse mortgage can satisfy a variety of needs. You can use the money to payoff debts, deal with financial emergencies, travel, increase your monthly income, pay for home improvements, help your children or grandchildren, or establish a cash reserve for future needs. There are many reverse mortgage possibilities.

How does a reverse mortgage work? With a reverse mortgage, the lender sends cash to you according to the plan you select. You make no monthly mortgage payments for as long as you live in your home. The more cash you receive, the greater the loan balance owed against the property. A reverse mortgage is a non-recourse home loan. This means there is no personal liability to you or your Heirs, no matter what. Repayment is due after all homeowners permanently vacate the home (die, sell, or permanently move out). That repayment comes out of the equity or by any other means chosen - your Heirs could refinance the home, or write a check, or sell the property.

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