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What is a Reverse Mortgage?

What is a Reverse Mortgage?A reverse mortgage (or home equity conversion, as it is sometimes called) involves selling the equity in a home while retaining the right to live in that home until death (a life estate). It turns a home’s equity into regular cash payments. However, there are age restrictions on this procedure, as well as other disadvantages that might outweigh the benefits for some people.

We suggest that you seek legal counsel when pursuing such a plan.

What is a reverse mortgage?
A reverse mortgage is a type of home equity loan that allows you to convert some of the equity in your home into cash but retain your home ownership. Reverse mortgages work like traditional mortgages, only in reverse. Rather then making a payment to your lender each month, the lender pays you through advances against your equity. Unlike conventional home equity loans, most reverse mortgages do not require any repayment of principal, interest, or servicing fees for as long as you live in your home. Funds obtained from a reverse mortgage may be used for any purpose. This type of remortgage was originally designed so that seniors whose homes are paid for, or nearly so, can finance living expenses without having to sell their property.

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