Reverse Mortgages 101
As money becomes tight during the golden years, retirees are banking on their homes — in reverse.
By taking on a reverse mortgage, borrowers aged 62 and older can cash in on the value of their home and avoid paying back the loan for as long as they live in the property. These types of mortgages help retirees lessen their expenses and increase their monthly cash flow. Borrowers can generally receive their reverse mortgage cash in either one lump-sum, a regular monthly cash advance or as a line of credit.
But while a reverse mortgage can offer much needed supplemental income for retirees, it has some expensive downsides. The greatest risk is perhaps the upfront fees that are involved. For example you could give back 7% to 10% of your withdrawal in the form of fees. Borrowers don’t pay this out of pocket, but it does come out of the proceeds.
Post from: Reverse Mortgage Loan Blog
