Is a reverse mortgage right for you?
A reverse mortgage loan allows a homeowner to borrow money against the value of his or her home without having to repay the mortgage amount until after the home is sold, which usually occurs after the homeowner dies. The loan is structured so that the loan amount will not exceed the value of the home, so there's no worries over owing more than the home is worth. And any additional value may be passed on to the heirs. Reverse mortgage loans were created this way so struggling seniors can receive the funds they need to cover living expenses, pay medical bills, and keep the financial independence, without losing their home.
The Consumer Finance Protection Bureau recommends taking "the time to get multiple quotes and compare fees," when it comes to taking out a reverse mortgage loan. This is particularly important because the fees and costs associated with taking out your loan are not mandated, and can vary greatly from lender to lender. With LendingTree, we'll help connect you to multiple lenders who will provide you with a quote on your reverse mortgage. Once you compare the quotes and fees, you can make the best decision for you and your family, knowing you did your due diligence.
You can qualify for a reverse mortgage if:
- You’re 62 years of age or older
- The home must be your primary residence
- You must have paid off most of your current mortgage
What is a Reverse Mortgage?
A reverse mortgage is a government insured loan that allows individuals 62 years of age or older to access the equity in their primary residence and convert it to cash while continuing to live in the home. Instead of making monthly mortgage payments, payments are made to the individual.
Tips and pitfalls of reverse mortgages
- There is no such thing as an AARP reverse mortgage
- Put both spouse names on contract so it won’t expire if one is deceased
- Put reverse mortgage in estate planning
- Reverse Mortgage
- A reverse mortgage is a type of loan available to homeowners age 62 and older. Instead of purchasing a home and taking out a traditional mortgage, a... <a href='/glossary/what-is-reverse-mortgage' title='See the full definition of Reverse Mortgage'>read more</a>
- Home Equity
- Home equity is the difference between the market value of a home and any outstanding mortgage balance(s). A homeowner with a $200,000 property and a... <a href='/glossary/what-is-home-equity' title='See the full definition of Home Equity'>read more</a>
- U.S. Department of Housing and Urban Development. The Federal Housing Administration (FHA) within HUD insures home mortgage loans made by lenders and... <a href='/glossary/what-is-hud' title='See the full definition of HUD'>read more</a>
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