What is a reverse mortgage?
Reverse mortgages are focused on Mature Adults
A reverse mortgage is a mortgage that will pay a dividend to the home owner from the equity in the owner’s home.
Reverse mortgages are a plus when a homeowner is faced with the decision to either sell their home to get money to live or live in the home and have money, while the asset is increasing in value.
If a homeowner has significant equity in a home, a reverse mortgage might be the answer.
How the loan works:
Based on the home’s value, the lender makes payments to the borrower as monthly income, a lump sum of cash or a line of credit; borrower retains ownership; no repayment until the homeowner dies or sells the home.
Qualifications:
Homeowners must be at least 62 years old and live in the home or condo as their primary residence.
Income taxes and Social Security:
Proceeds considered loans, not income; they are not subject to income tax and do not affect Social Security benefits.
Additional resources on reverse mortgages:
Fannie Mae
Senior Job Bank FAQ on Reverse Mortgages
U.S. Department of Housing and Urban Development
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