Reverse Mortgage Reverse

Wednesday, June 06, 2007

Under a reverse mortgage, borrowers 62 and older can turn home equity into a stream of cash they don't have to repay until they sell and move out, die or otherwise no longer own the home. The money could come in handy, say for those with fixed or falling incomes, who need cash now, especially if there are no living heirs.

Basically anyone who is over age 62, owns and lives in their own home and has paid off at least 60% of the loan can apply for a reverse mortgage. There is no proof of income requirement.

The loans are available via a lump-sum payment, a line-of-credit, monthly check or some combination of all three.

According to the National Reverse Mortgage Lenders Association most growth has been seen in the federally-insured Home Equity Conversion Mortgage (HECM) variety, which accounts for more than 90 percent of the market. Some 43,000 HECMs were originated in the 2006 fiscal year, rising to 76,000 in 2006.

Reverse Mortgages have become increasing popular in the last several years and will only grow in popularity as the baby boom market looks for ways to finance their retirement.

AARP has some very good information on reverse mortgages.

In addition to federally-insured reverse mortgages, lender-insured, and uninsured loans are also available for a variety of costs, terms and conditions.

More Reverse Mortgage Information