Understanding Reverse Mortgages

With a reverse mortgage, the lender sends you cash and you make no repayments, so your debt increases while your equity shrinks. When a reverse mortgage becomes due and payable, your home’s value will have been turned into loan advances, loan costs, or left-over equity.

While that notion might seem alarming, remember that’s precisely what a reverse mortgage borrower needs - the ability to “spend down” their home equity, while they live in their home, without having to make monthly loan payments.

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