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What are "reverse mortgages" and how do they work?
A reverse mortgage is a loan for homeowners age 62 and older that requires no monthly mortgage payments. The loan is repaid when the borrower passes away, leaves the home permanently or sells. Funds available are distributed as a lump sum, line of credit or structured monthly payments.
How It Works: Access a portion of your home’s equity Percentage is based on age of youngest borrower Make no monthly mortgage repayments Funds are tax-free, and may be used for virtually anything Loan is repaid when you pass away or sell your home Any remaining equity belongs to your heirs
Something along the lines of you have equity in your home. You basically borrow against the equity in lumpsome payments. I don't trust all the stuff they tell you about "freeing" yourself financially. Basically you are putting yourself in debt what you already should have as a gain. Don't listen to the beautiful picture they paint! I used to work in the financial world and for a large bank. It's a way for the banks to keep making money is all!!!
