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Nov 16, 2022 · A reverse mortgage is a loan based on the paid-up current value, or equity, in your home. Unlike a conventional mortgage, your lender pays you — in monthly payments, through a variable line of credit or in a lump sum. You don't have to repay the loan until you sell your house, move or die.
Feb 15, 2011 · 1. Make sure a reverse mortgage is right for you: Talk to a CPA, financial planner, or elder-law attorney. 2. Shop around. Some lenders are reducing or even waiving origination and servicing fees. 3. Get an estimate of how much you can borrow at our reverse mortgage information center.
- Is this your forever home? Reverse mortgages are expensive (see the third question). If you or your spouse would want to move later on — or if your home isn't suitable for aging in place — you're better off selling and downsizing.
- How much can you borrow? Your maximum loan size is based on your home equity, your age (the older you are, the more you can borrow) and interest rates.
- Do you know what it will cost? Mortgage insurance is 2 percent of the appraised value of the home or the federal loan limit, whichever is lower. Closing costs are similar to those of a traditional mortgage.
- What will you do with the proceeds? After you've sweated years to accumulate equity in your home, it's courting disaster to get your hands on the money without a clear plan for it.
Nov 29, 2022 · AARP has supported reverse mortgage products to help older Americans withdraw their home equity in retirement. While the organization does not offer reverse mortgages, it offers helpful information on this type of loan if you seek more information from an independent third party.
Oct 18, 2023 · Understanding the pros and cons of reverse mortgages can help you determine if it’s your best choice. A reverse mortgage is a loan that lets homeowners age 62 and older convert some of their home equity into cash. It pays you, unlike traditional mortgages, where you make payments to a lender.
May 14, 2015 · The changes require that lenders determine whether would-be borrowers have enough income to keep up with property taxes and homeowners insurance so they don’t default on the loan and, possibly, lose their home. HUD’s Federal Housing Administration insures most reverse mortgages.
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Apr 19, 2023 · To get more general information about the pros and cons of reverse mortgages, visit the AARP website. The Consumer Financial Protection Bureau offers a helpful reverse mortgage discussion guide and advises consumers considering taking out a reverse mortgage to consider all other alternatives.
