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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 · A reverse mortgage is a loan against your home equity that you don't have to pay back as long as you live there. Assuming you have enough equity in your home, you could use a reverse mortgage to pay off your existing mortgage.
- 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.
5 days ago · A reverse mortgage is a loan specifically designed for homeowners aged 62 and older. Using the equity in your home, the lender makes payments to you – as a lump sum, regular monthly payments, a ...
Aug 15, 2024 · Understanding the pros and cons of reverse mortgages can help you make better-informed choices. We addressed common questions about how reverse mortgages work and their impact on your financial situation.
Oct 15, 2012 · Reverse mortgages are growing in popularity as older adults tap their home equity to help them maintain their standard of living in retirement. But these loans come with potentially serious risks and AARP has been working for years to educate older homeowners on reverse mortgages, so they don't get….
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Overview of the Pros and Cons of Reverse Mortgages. For seniors who need cash to make home repairs, cover living expenses or pay unexpected medical bills, a reverse mortgage has several benefits. Before you agree to a reverse mortgage, however, it’s important to understand the potential drawbacks. The table below summarizes the pros and cons.
