What is a Reverse Mortgage?
A reverse mortgage is a loan against your home that you do not have to pay back for as long as you live there. You must comply with the terms of the loan. For people who are retired and have a nice sum of equity in their home, they may prefer to remain in their home. A reverse mortgage may be a viable solution that will offer additional financial security.
Advantages of a Reverse Mortgage
Reverse mortgages can take a portion of your home’s equity and turn it into cash. Additionally, a Home Equity Conversion Mortgage (HECM) loan is backed by FHA (Federal Housing Administration). What people love about reverse home mortgages is the idea of aging in your home that you love instead of having to move out.
There aren’t any monthly mortgage payments however the loan must be repaid when the last remaining borrower leaves the home or fails to comply with the loan terms.
Are there Real Estate Taxes with a Reverse Home Mortgage?
Reverse home mortgage borrowers are responsible for paying property taxes, homeowners insurance and keep up the home’s maintenance. You still own your home but the lender places a lien on your home as they would with any other mortgage.
Could you lose your home?
You will not lose your home as long as you keep your property taxes paid and current. You must keep up your homeowners’ insurance, and comply with the loan terms.
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