Page 8
A Resource of Reverse Mortgage

reversemortgage  .. More Definitions

Homeowners age 62 or older can to convert the equity in their homes into cash with a reverse mortgage. The equity built up over years of home mortgage payments can be paid to you regardless of your income.

The reverse mortgage can provide seniors with cash for financial freedom and financial security to fully enjoy their senior years. The money can be used for just about anything; vacations, paying off debts, home improvement, even for long-term home care.

The reverse mortgage is different than a traditional second mortgage in that it pays you and no repayment is required because the loan is not due as long as the house is your principal residence. The amount you can borrow depends on your age, the current interest rate, other loan fees, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. The more valuable the home, the older you are, the lower the interest, the more you can borrow.

You still are required to pay your real estate taxes, utilities, and other normal homeowner bills, but with a reverse mortgage you cannot be foreclosed or forced to vacate your house because you missed your mortgage payment.

You might ask why are so few companies offering reverse mortgages? The main reasons are; they are a fairly new type of financial product, fewer people are potential customers (62 & older) that is until the Boomer wave hits, and they are very regulated which puts more of a burden on financial institutions so some lenders prefer not to participate (at this time).

If you have questions about a particular lender then contact: Federal FDIC or California State DFI.

More links: Guide To Long Term Care, Elder Financial Protection Network, and also search Google or Yahoo.