felixthecat
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A reverse mortgage is mostly pitched to older people who own their homes outright - not people who still owe money on a mortgage as some of these answers seem to indicate. Retirees who own their homes but are having difficulty paying for carrying expenses with just small pensions and social security income are candidates for this type of mortgage. Basically, it's like taking a portion of your equity in your home as income each month to help pay your monthly expenses. Personally, I would not advise my parents to do it because you are basically selling your home, bit by bit, to the reverse mortgage lending institution. I believe most of these are set up so that you are never going to have to get out of your home (you would be assured a 'lifetime tenancy'), but the theory is that your home equity will outlast you! It's a sticky wicket and not something I would advise anyone to do unless they were in dire straits... |
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STEVEN F
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A reverse mortgage is a home equity loan that get BIGGER every month instead of getting smaller. The lender sends the elderly homeowner a check each month. The idea is that when the person dies, the home will be sold for enough to pay of the loan. You would be better off selling the house now and renting it back for the rest of your life. |
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Nancy Kay
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If you are over age 62 and own your house free and clear of any loans, or with only a small balance, you can take out a loan against the equity in the property that either gives you money in one or more big chunks, or monthly, with nothing to pay back until the property is sold or you die...then the unpaid balance of the loan plus interest will be taken from the property before you or your heirs get the remaining equity at sale or death. |
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doug0102
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The first three answers are complete nonsense.
Reverse mortgage is available to people 62 and older. It's like selling your house back to the bank. You must have equity in the house and when you get a reversed mortgage, you do not have to make payments on it anymore and you actually get monthly payments from your bank (the amount of these payments depends on the interest rates, your age and the amount of equity you have in the house.)
You can live in your house until you and your spouse die. When the last of you die, the house goes to the bank.
A reverse mortgage is a good idea for older people, who know they are not planning to leave their house to anybody after they pass away.
There is are a lot of "small print," so before doing it, consult with your financial adviser. |
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klove1969
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A reverse mortage is where they take the equity you have in your home (if you own it) and set up monthly payments to you based on value of home. So if you home is valuted at 400,000.00 dolars lets say and you agree to a monthly payment of 1,500.00 this amount per month plus intrest will be deducted from the value of your equity in the home. If you live long enough to collect the full ammount agreed upon they own your house. If you die befor collecting the full amount the benificiey in the inheratance of your home must repay the ammount you recieved plus intrest to own the home. |
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dalenjen
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www.aarp.org
"A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:
all at once, in a single lump sum of cash;
as a regular monthly cash advance;
as a "creditline" account that lets you decide when and how much of your available cash is paid to you; or
as a combination of these payment methods.
No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older. " |
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jimmy.lemongrass
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The Bank gives you money back for an equity stake in the property. |
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Pitty T
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A reverse mortgage or a conversion mortgage lets you use the equity value of your home as collateral and help you earn income from it. You are eligible if your age is more than 62 years and need money for emergencies. The good thing is you are earning money while staying in your home. The difference between the normal mortgage and reverse mortgage is that in normal mortgage, you pay the bank monthly, while in the reverse mortgage the bank pays you. |
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Joan H
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It's mainly for older people, who own their own house, but not enough to live on, in cash coming in. The company takes your house, and pays you a monthly income. |
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alfonsopaul
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It is a loan available to senior citizens with a home with payment of said loan deferred till death/sale of home/sent to nursing home. |
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wizjp
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For senior citizens to get money out of a house without having to pay it back; the balance is the responsibility of their estate or the house goes over to a bank when they die.
62 1/2 i think to qualify |
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Tinamarie
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DON'T DO IT. That's all I know........... |
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mefuture
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A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM) is a relatively new product. A reverse mortgage provides unique benefits for its target market: someone over 62 who lives in his/her primary residence, who has substantial equity in his/her home, and who has little or no income. A reverse mortgage is a loan against the equity in your home that you don’t need to pay back for as long as you live in the home. Eligibility for a reverse mortgage is set by the Federal Government; The Federal Housing Authority FHA tells HECM lenders how much they can lend you, based on your age and your home's value. For more info visit http://www.bills.com/reversemortgage/ |
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civil_seismic_eng
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A dumb Idea |
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kaliroadrager
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You bought a house at an inflated price, and since the market has gone down, you now owe more than what the house is worth if you were trying to sell it now..... |
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Mr. Know
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you pay the principle first and have a balloon payment of interest at the end..... and thats when the bank takes the house from your children :P |
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