Reverse Mortgage Loan Blog

DEAR BOB: Please explain how a reverse mortgage works. Who actually owns the home, the person buying out the mortgage or the homeowner? –David P.

DEAR DAVID: If all owners of a principal residence are 62 or older, and there is no or a small existing mortgage balance, the reverse mortgage lender pays the senior citizen homeowner either monthly lifetime income, a lump sum, and or a credit line (except in Texas). It’s the homeowner’s choice which alternative or combination is preferred.

The homeowner continues to own the home, subject to the reverse mortgage, which does not require any repayment until the homeowner sells the residence, moves out longer than 12 months, or dies.

Then the reverse mortgage “matures” and must be paid off, including principal and accrued interest. The remaining equity does to the homeowner or the heirs.

Found here.

Bookmark It

Hide Sites