How To Guide For: A Look At What A Reverse Mortgage Is And The Benefits And Disadvantages

A reverse mortgage is a loan available to homeowners, 62 years or older, that allows them to convert part of the equity in their homes into cash. A reverse mortgage was devised to help retirees with limited income use the accumulated wealth in their homes to cover basic monthly living expenses and pay for health care. The reason its called a reverse mortgage is because the lender makes monthly payments to the borrower. The loan is repaid after the borrower moves out or dies. There are benefits and disadvantages to reverse mortgages. Lets start with the benefits. The biggest benefit is that a reverse mortgage is a source of funding for individuals who need to increase their income to be comfortable in retirement. A reverse mortgage increases income without increasing monthly payments and allows a retiree to stay in his or her home. Now lets take a look at a disadvantage of reverse mortgages. The biggest disadvantage is cost, which can be very high due to reverse mortgage fees which can include the interest rate, loan origination fee, mortgage insurance fee, appraisal fee, title insurance fees, and various other closing costs. To get more in depth information on what a reverse mortgage is and the benefits and disadvantages click on the pictures below to read the articles.