Review:
Reverse Mortgage
overall review score: 3.5
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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