HOW A REVERSE MORTGAGE WORKS WORKS
Lets say you are a married couple age 64 & 69 on a low to moderate fixed income , your getting by however money is tight making it tough to do the things you had dreamed of doing in retirement. Lets also say you have a home that is likely to appraise for $600,000 which you owe $150,000 on so you have a home with about $450,000 of equity and a payment on the mortgage of $1200 or so. Based on those numbers your existing mortgage would be paid off and you would receive a lump sum payment of around $175,000 and you would not have to make a mortgage payment or pay any of the money back until borrowers leave the home.
Lets say your a senior facing medical/mobility issues & even though you would much prefer to stay in the home you have been in for the last 30 years your thinking of selling your home & moving to an assisted living community to avoid being a burden on your relatives which is going to cost several thousand dollars per month. With a Reverse Mortgage you can afford to stay home & hire in home care givers thereby maintaining the life your used to without disruption which can be so stressful to seniors .
A Reverse Mortgage in the simplest of terms is a financial tool & like any tool it can be extremely useful when appropriate.
REVERSE MORTGAGE FACTS
FACT 1. Once your Reverse Mortgage is funded you do not continue to make mortgage payments, as long as the borrower/borrowers live in the home no mortgage payment is made. When the borrowers move out of the home whatever mortgage is due on the home will need to be paid & whatever proceeds are left go to the homeowner.
FACT 2. Reverse Mortgage`s are backed by the Federal Government and require counseling for all borrowers prior to approval & funding so if your loan is approved the process will follow all guidelines set forth by the Federal Government.
Fact 3. The homeowner retains title to the home, NOT the Bank.