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Feb 21, 2024 · . Key takeaways. If you're a homeowner aged 62 or older, a reverse mortgage can help you obtain tax-free income, allowing you to stay in your home, pay bills, supplement your income and more. A...
- Peter G. Miller
A reverse mortgage is a loan that allows older home-owners to convert the equity in their homes into cash: Borrowers are not required to make monthly or other periodic payments to repay the loan. Instead, the loan balance increases over time. All homeowners must be at least 62 years of age to qualify.
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Nov 29, 2022 · AARP influences reverse mortgage policy. In addition to its third-party role in providing information about reverse mortgages, AARP also takes a policy role through its Public Policy Institute. Representatives from AARP often appear to work with policymakers on reverse mortgage protections and availability during congressional hearings.
6 days ago · Now, they might get only 35 percent. For example, Simmons says, the owners of a home valued at $500,000 might once have been able to get a $250,000 reverse mortgage. Now, they would be limited to $175,000. Interest rates have ballooned from near zero to between 5.25 and 5.5 percent as the Federal Reserve tries to restrain inflation.
Learn more about the pros and cons of reverse mortgages, including the typical criteria to get one. Key Takeaways A reverse mortgage lets you convert some of your home equity into cash, but they ...
The table below summarizes the pros and cons. Potential Benefits. Potential Drawbacks. Source of cash. Risk of foreclosure. Option to use proceeds to pay off an existing mortgage. Fees and recurring costs. Ability to stay in your home. Reduced inheritance for family members. No income tax on proceeds. Impact on public benefits eligibility.
Your loan gets bigger over time. Unlike regular mortgages, the loan balance on a reverse mortgage goes up the longer you have it. As your loan balance grows, your equity in your home shrinks. These loans can be expensive. Reverse mortgage lenders can (and do) foreclose.