While they are better known for being a scam, reverse mortgages can actually be a very helpful tool. The Talking Cents blog has the answers to your reverse mortgage questions. If you are looking for options, now is the time to learn more about this type of mortgage.
Answers to Reverse Mortgage Questions
Whether you are researching reverse mortgage info for yourself or for an older parent, there can be some confusion. Let’s dive into the basics of these mortgages to see if it might be a good option for you.
What is a Reverse Mortgage?
A reverse mortgage gives homeowners, 62 years of age or older, access to money that they have built up as equity in their homes. The money can cover a variety of costs including home improvement, healthcare expenses, retirement income or to finish paying a current mortgage. As a result, reverse mortgages can provide financial independence by making funds available to the homeowner.
How Does a Reverse Mortgage Work?
How do reverse mortgages work? A regular mortgage is a loan to pay for a house. The borrower makes regular monthly mortgage payments to pay back the lender. However, a reverse mortgage is a loan against the equity already built up in the property. The lender actually makes monthly payments to the homeowner!
Why Should I Consider a Reverse Mortgage?
One of your reverse mortgage questions might be about their usefulness. Here are a few ways they can be a helpful financial tool:
- Supplementing daily living expenses.
- Paying for home care costs.
- Covering the cost of home repairs and structural adaptations.
- Helping with emergency costs.
How Can I Avoid a Reverse Mortgage Scam?
Reverse mortgage scams are a form of fraud by unscrupulous individuals. They are designed to steal the equity from the property of an unsuspecting homeowner. Therefore, do not respond to unsolicited advertisements. Finally, seek out reverse mortgage information from a counselor before signing any documents or receiving any payments from a home that you did not purchase.
For more information on reverse mortgages or managing your finances, call ACCC today at 800-769-3571.