Facts About Reverse Mortgages

Why would a person consider doing a Reverse Mortgage?

What is a Reverse Mortgage?

A Reverse Mortgage is a Home Equity Conversion Mortgage (HECM).

These come in two basic varieties.  In the first, the lender loans a lump sum of money to a borrower.  In the second, the borrower has a line of credit against which he can borrow as needed.  In both cases, the borrower signs a promissory note that he will repay the loan.  Unlike the “forward mortgage” where the borrower pays the loan back in monthly installments, in this case the borrower does not make monthly loan payments.  Instead, the debt is repaid when:

* You die
* Sell the home
* Permanently move out of the home
* Fail to pay your property taxes
* Fail to maintain your property in good repair
* Fail to keep your home insured
* Declare bankruptcy
* Donate or abandon your home
* Add a new owner to your home