Your Guide to Reverse Mortgages
What is a Reverse Mortgage?
A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a loan available to home owners age 62 or older that allows borrowers to turn their home’s equity into cash. Unlike a traditional loan or second mortgage, the borrower does not have to repay the home until they no longer live at the residence, or fail to meet their mortgage obligations.
Traditionally, a reverse mortgage is a great option for those looking to pay for their basic needs in retirement. Most borrowers can use this as a form of income while they are waiting to free up other retirement funds, such as a 401k. This also allows the borrower to free themselves from old debts or supplement their monthly income.