Q. What is a REVERSE MORTGAGE and what is the best way to learn more about them?
A. REVERSE MORTGAGE is a loan that enables senior homeowners, 62 or over, to convert part of their home equity into tax free income without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower permanently leaves the home.
Q. Are all REVERSE MORTGAGEs the same?
A. No, actually there are two basic types of REVERSE MORTGAGEs:
Federally-Insured REVERSE MORTGAGEs, known as Home Equity Conversion Mortgages (HECM). These programs are insured by the U.S. Department of Housing and Urban Development (HUD). They are widely available, and can be used for any purpose.
Proprietary REVERSE MORTGAGEs. These are private loans with unique features that appeal to certain kinds of borrowers, usually larger, more valuable properties. These types of reverse morgtages are backed by the companies that develop them.