What Is Reverse Mortgage | How Can A Reverse Mortgage Help You

How a Reverse Mortgage Can Help You

A reverse mortgage is a unique loan program available only to senior homeowners. Rather than paying a monthly payment for a loan based on home equity, the homeowner receives money from the lender without interest. The money can be received in one lump sum, through a series of payment installments, or as a line of credit that can be drawn upon at any time.

The loan is repaid when the home is no longer occupied by you or your spouse. When the home has been vacated, any monies not yet paid go toward the loan amount. Upon the sale of the home, the reverse mortgage is paid in full, and any remaining proceeds go to you or your estate. Essentially, the loan is not repaid until you no longer have use or need of your home.

A reverse mortgage can help you in many ways. First, the income from a reverse mortgage can help you make ends meet when social security and retirement funds are simply not enough. According to the US Department of Labor, the number of seniors returning to work has increased more than twenty five percent in the last decade. The obvious reason for this increase is the simple fact that retirees can no longer support themselves on social security and retirement funds alone. By getting a reverse mortgage, you can enjoy additional income while still enjoying your stress free retirement.

The second way that a reverse mortgage can help you is that the income is tax free.  In a time when taxes eat up most of the meager income that retirees do receive, this is a huge benefit of the reverse mortgage. The reverse mortgage also does not disqualify you for Medicare or social security benefits, which are typically much needed by seniors over age sixty-two.