A reverse mortgage is a type of home loan that allows a senior homeowner to borrow money from the bank based on the equity in their home. Reverse mortgage eligibility is limited to homeowners aged 62 or older who use the home as a primary residence and who either own the home outright or have a low mortgage balance. While a reverse mortgage can offer senior homeowners monthly income, it is not necessarily the right choice for everyone. Here’s what you need to know about reverse mortgages to he...
All senior homeowners should know and understand the main pros and cons of reverse mortgages before turning their home equity into spendable cash.
a line of credit. Unlike a regular mortgage—the type used to buy a home—a reverse mortgage doesn't require the homeowner to make any loan payments during their lifetime. Instead, the...
equity line of credit (HELOC). A reverse mortgage company provides the homeowner a lump-sum payment, a series of installment payments, or a line of credit. Interest and fees accrue on the...
Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews. If you're 62 years or older, you might be eligible for a reverse mortgage. These types of mortgages allow you to turn your home equity into cash without selling or taking on any monthly payments. You can continue living in the home while using your home equity to support your needs as you age ...
Mortgage Lenders Association. In 2023, 32,991 borrowers entered into reverse mortgages.2 However, other ways to tap home equity—such as home equity loans, home equity lines of credit...
Pros and cons ; Pros: Money can be used for any purpose · Most are backed by the Federal Housing Administration (FHA) · Interest rates are typically lower than a home equity loan ; Cons: You must be 62 or older to qualify · Erodes equity of home over time · Can be more expensive than a traditional mortgage
You need to have enough equity so that a reverse mortgage will leave you with a reasonable lump sum, monthly payment, or line of credit after paying off your existing mortgage balance...
A forward mortgage is a typical mortgage used to buy a home, while a reverse mortgage allows homeowners 62 years old or older to withdraw cash from their home equity via a credit line, lump sum, or...
A reverse mortgage is a type of loan reserved for those 62 and older. Here’s how it works, how you can get one and what to be wary of.