What The Heck Is A Reverse Mortgage?
I'm guessing that anyone reading this is familiar with a standard mortgage. If you aren't, a mortgage is a loan to purchase a home. Like most loans, you make payments every month until the loan is paid in full. With A Reverse Mortgage or HECM (Home Equity Conversion Mortgage), you don't make a payment at all.
Recently, I was reading a post by my friend Trevor Carlson who is a Reverse Mortgage specialist. His blog post entitled "Reverse Mortgages 101: What is a Reverse Mortgage?", provides a great explanation on the subject. You can read his entire article here, What is a reverse Mortgage.
You can use a Reverse Mortgage to tap into the equity of your home, or to even purchase a home and not make a single payment! Imagine buying a home and not having to make a mortgage payment. Sounds a little hard to believe doesn't it? I can assure you there is no trickery here, you can purchase a home this way and people do it every day. You still have to pay the property taxes, insurance and any home owner association dues, but no loan payment.
The interest on the Reverse Mortgage is added to the balance of the loan every month. The loan isn't paid back until you sell your home, or pass on from this world. In the later case, the bank will sell the home and even distribute any remaining equity to your heirs.
The Reverse Mortgage works in reverse of a standard mortgage. Instead of building equity in your home, the equity you have is gradually reduced while you get to remain in your home. You can see how this can be a lifesaver for someone who is struggling to keep up with living expenses and doesn't want to give up their home.
Many are choosing to use a Reverse Mortgage as part of retirement planning. Why have unused equity in your home when you can use that equity to travel, pay bills, and enjoy life all while remaining in your home. Just think of the possibilities available to you when you have a safe secure place to live and no house payment!
Reverse Mortgages are an absolutely amazing product that has helped the financial situation of countless individuals. If you are age 62 or older, you may be a candidate for a Reverse Mortgage. There are lots of options with a Reverse mortgage that are best to be discussed with a professional. If you live in Idaho and are thinking about a Reverse Mortgage, contact me and we can discuss the possibilities.