Reverse Mortgages – what’s the catch?
For some seniors, a reverse mortgage represents a viable option for funding long term health care. Now don’t confuse a reverse mortgage for a home equity loan because there is a major difference. While a home equity loan requires you to pay back the cash you receive with interest, a reverse mortgage does not. Basically it allows you to enjoy the value of your home now while still being able to live in it and not make any payments.
And in the case of a senior in need of assistance funding long term care, the cash advance can be a true lifesaver.
Now you’re probably wondering, what’s the catch? There can be some, so contact our office before you commit yourself or your parents.
Well, there are a few rules. You must be at least 62 years of age. You also have to own and live in the home as a primary residence. In the event that the home is no longer used as the primary residence–whether because of a move, sale, or death–the loan must be paid back. At that point, if the sale of your home equals more than you owe on the reverse mortgage, the excess goes to you or your estate in the event of your death.
Scared your home won’t sell for enough to pay off the reverse mortgage? Don’t be. The repayment of your loan can never be greater than the sales price of the home.die, equity, loans, move, Primary residence, reverse mortgage, sale