What is a Reverse Mortgage

     A Reverse Mortgage is a special type of mortgage loan for home owners 62 years of age or older.  These amazing loans allow seniors to use their home equity without creating monthly payments.  This equity becomes available while you continue to remain in your home for as long as you choose.

     How does this compare to a normal or forward mortgage?

     A forward mortgage is when you, the homeowner, finances your home and make monthly payments to reduce the principal balance over a scheduled period of time. By using your monthly income to pay down the mortgage you build equity in your home. After many years, that equity exceeds the loan until finally the house is free and clear of loans or the loan has been paid down to a fraction of the value of the home.

     The reverse mortgage, on the other hand, is a loan that is taken against the equity in your home. Here, instead of using monthly income to pay the mortgage, the mortgage pays you a monthly income. It can even be arranged to pay a lump sum amount, establish a credit line, or a combination of all three.

For many seniors, it is the answer to their financial situation.