Discover the three different types of reverse mortgages available to qualifying homeowners age 62 and older.
Imagine if your mortgage lender paid you instead of you paying your lender. With a reverse mortgage, that’s exactly what happens. However, you don’t just get free money each month. There are some important caveats to be aware of with reverse mortgages, and these loans are only available to select borrowers. If you’re considering a reverse mortgage, here’s how they work, the types available, and their pros and cons. A reverse mortgage draws funds from your home equity and pays you in regu...
Types of Reverse Mortgages There are three types of reverse mortgages. The most common by far is the government-sponsored home equity conversion mortgage (HECM) . HECMs represent almost all...
States should limit fees and interest rates of proprietary reverse mortgages, aka jumbo reverse mortgages. Lender responsibility: The Consumer Financial Protection Bureau (CFPB) should...
All senior homeowners should know and understand the main pros and cons of reverse mortgages before turning their home equity into spendable cash.
Other types of reverse mortgages are less restrictive but more costly; however, single-purpose loans are also harder to come by. MoMo Productions / Getty Images Understanding Single-Purpose...
Reverse mortgages allow you to borrow against your home’s value without the monthly payments that traditional mortgages or home equity loans require. The loan must only be repaid when you no longer use that home as your primary residence. The loan still accrues interest. This type of loan typically doesn’t require applicants to have a minimum credit score. Instead, it focuses on how much equity you have in your home, depending on your age. ...
2 All HECMs are reverse mortgages, but not all reverse mortgages are HECMs. What Are the Downsides of an HECM? Some drawbacks associated with HECMs include the required annual and up-front...
Key takeaways ; A reverse mortgage allows older homeowners to tap their home’s equity for tax-free payments. The most common type of reverse mortgage is a Home Equity Conversion Mortgage (HECM), for borrowers ages 62 and older. Some reverse mortgage lenders offer options for borrowers ages 55 and older. From the payments to repayment, reverse mortgages can be structured in a number of ways. Check with a financial advisor or estate attorney to ensure you understand the impact on your and your h...
Reverse mortgages and annuities are two quite different financial products, but both are used to generate a steady stream of income for retirement.