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Reverse Mortgage

overall review score: 3.5
score is between 0 and 5
A reverse mortgage is a type of loan for homeowners aged 62 or older that allows them to convert part of the equity in their homes into cash. Unlike a traditional mortgage where the borrower makes monthly payments, with a reverse mortgage, the lender pays the borrower.

Key Features

  • Borrower must be 62 years or older
  • The loan does not have to be repaid until the borrower moves out of the home or passes away
  • Flexible options for receiving funds (e.g. lump sum, monthly payments)
  • No income or credit score requirements

Pros

  • Allows seniors to access their home equity without selling their home
  • Provides additional income for retirement
  • Can help with financial stability in later years

Cons

  • Accrued interest can significantly reduce the equity remaining in the home
  • High upfront costs and fees
  • May impact eligibility for government benefits like Medicaid

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Last updated: Sat, Nov 23, 2024, 02:57:15 PM UTC