What Is A Reverse Mortgage, And How Is It Different From A Typical Mortgage?
Everything you need to know about this appealing retirement ‘paycheck’ If you are 62 years old or older and you own a home, you could be eligible for a reverse mortgage to help you tide over a financial difficulty. A reverse mortgage is a loan that lets you convert the value of your home into available cash while allowing you to continue to live in the house. In the most basic sense, it is a loan against the value of your property. The most significant difference, as the name suggests, is that with a reverse mortgage, the financial institution or lender pays you. After assessing the value of your home, the lender decides an interest rate for the outstanding amount of the loan. This interest rate can either be a fixed rate for the duration of the credit or one that changes through the loan period. You, as the borrower, also have to pay specific fees associated with the loan along with insurance premiums. Let’s look at how a borrower can decide how the amount is paid out.