A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrowers no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well. The lender who provides reverse mortgage is called a reverse mortgage lender.
The amount available is based on age, the value of the home or maximum claim amount and current interest rate. A sum of money is provided in cash, a line of credit to draw from or a monthly income. There are no monthly payments required and the loan is not due until the last surviving borrower moves, sells the home or passes away. Then the entire loan balance is due. The loan balance includes the amounts advanced, fees and interest charges. Since the home remains in the homeowner's name they or their estate benefits from the appreciation. A reverse mortgage lender helps you to:-
- Supplement your income with monthly checks
- Pay off debt or existing mortgages and have no more payments
- Home Repairs and Improvements
- College Tuition for grandchildren
- Purchase A New Car
- Purchase A New Home
- Pay for Prescriptions
- Pay for Taxes and Insurance
- Replenish depleted Savings
- Pay for in-home care
- Down payment assistance for family financial solutions and support for elderly family members
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