In 1989, The Department of Housing and Urban Development, or HUD unveiled the reverse home mortgage plot. The intention was to release over 4 trillion dollars of first mortgage equity that seniors had built up over they years paying of their mortgages.
Currently there is a fantastic need for this type of reverse loan. Seniors who are plotting for their twilight years in a failing economy, are flocking to the reverse mortgage option in order to raise the liquid funds required to make a comfortable retirement.
The reverse home mortgage is making available funds to seniors who are able to spend the funds at their discretion. Essentially the reverse home mortgage is paying you to remain in your home and will keep paying you for as long as you live there as your primary residence.
Those who over 62 and are seeing their Social Security cut back or reduced find it more vital than ever to access the equity in their homes. The rising cost of health care and prescriptions is also on the rise which adds to an already hard situation seniors are facing today.
More than 12.5 million seniors have this type of equity sitting in their first home mortgage. Many own their homes free and clear, and can access these funds through a reverse loan.
On a normal mortgage loan, the borrower would pay the mortgage company a monthly payment in which the interest is set over the life of the loan. With a reverse home mortgage that money is paid back to the homeowner by the bank if the form of a monthly payment, a single lump sum payment, or a line of credit.
As long as you reside in the home the loan will not need to be paid back. If you go or sell the home the paid funds your received through the reverse mortgage loan would be subtracted form the sale price of the home upon closing.
You can only be paid up to the homes appraised value and will never be responsible to pay back more that the original equity in the home.
Many seniors use the funds they receive to cover medical expenses, daily living expenses, home improvement expenses, or as a cushion to make retirement more comfortable.
With a reverse home mortgage you can feel comforted in the knowledge that all the hard work you place into paying of your first home mortgage can be accessed now. These funds can help provide security and comfort that will support you in your senior years ahead.