ASK THE EXPERT: What's A Reverse Mortgage?

By: RE/MAX Complete




Q:   What's A Reverse Mortgage?

A:   A reverse mortgage is a home loan designed specifically for seniors who already own a home and would like to use some of the home's equity to supplement their retirement (or other) income.  This mortgage is called "reverse" because the payments are reversed -- instead of the borrower making payments to the lender, the lender makes payments to the borrower.   There are several different forms of this loan:  the borrower can receive monthly payments, or take out a lump sum, or draw from a line of credit as needed.  Over time, the loan balance increases (and interest accumulates) as the borrower is not required to make payments.  The loan is paid back when either

• the borrower sells the home
• permanently moves out of it
• passes away.

The amount a person can qualify for depends on his or her age and the value of the home.  There are no income requirements.   Because of the unusual nature of this loan, counseling is mandatory and is done by government-approved agencies.  The AARP has more in-depth information on their web site:  www.aarp.org/revmort/

Have a tough real estate question?  We are only a phone call or an e-mail away:

Nicole Cloward
435-241-0410
nicolecloward@q.com

Melissa Collings
435-224-3272
melissa.collings@gmail.com