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What is a reverse mortgage? A reverse mortgage is often advertised as a way for seniors to receive extra cash every month. The cost of living today is higher than the one anticipated by the people who calculated the retirement pension. This means that the retired senior citizens could not afford to keep their standard of living. One of their options is to move to a low-income neighborhood where the cost of living is more affordable or to get a reverse mortgage which is a type of loan. The reverse mortgage is essentially a loan that a senior citizen can obtain when he or she has reached 62 years old. Using the equity of the house, a senior citizen is eligible for a reverse mortgage. This type loan is offered by local governments to help the citizens pay property taxes or home repairs. But today, a considerable number of banks and mortgage lenders are offering reverse mortgages. On the surface, a reverse mortgage is the ideal solution for the retiree who needs extra cash, perhaps for medicine and other unexpected expenses. But when the details of a typical reverse mortgage are examined, it becomes clear that the borrower is at a considerable disadvantage. For example, not everyone is eligible for a reverse mortgage. The homeowner-borrower must own a home which is either fully paid or has a very small mortgage loan left. This will assure the lender that the home has equity. The homeowner must also be living in the said home for a greater part of the year, which will ensure that the home is being attended to and not allowed to deteriorate and devaluate. |