Reverse Mortgages Revealed
For homeowners who are 62 or older and feeling a financial squeeze, a reverse mortgage may be a viable strategy to consider. It’s a special type of home loan that is offered by the
US Department of Housing & Urban Development, and it allows older Americans to get access to some of the equity in their homes.
For people who meet the age requirement, use their home as a primary residence and have little or no balance remaining on their mortgage, the program has five payment options. Participants can receive ongoing monthly payments, monthly payments for a specified period, a flexible line of credit which could be paid in a lump sum, or variations of these options. There’s never a need to repay the money – the lenders get their principal and interest when the home is finally sold. The seller or his/her heirs receive the remaining balance.
HUD requires candidates to go through a counseling session before they are permitted to enter the program. To find a list of approved, trained counselors and learn more about reverse mortgages, visit the HUD website
here.