What is reverse mortgage?

**snvtanmay** · 02-09-2010, 12:44 PM

Here is what i found on it but i want to know is it really beneficial for the home owner. I don't understand all the legal details.

Reverse mortgages continue to be one of the few areas of growth within the mortgage industry. The National Reverse Mortgage Lenders Association announced today that the industry has closed 112,100 Home Equity Conversion Mortgages or HECMs in Fiscal Year (FY) 2008, which ended September 30, 2008, surpassing the record loan volume for FY 2007, according to data provided by the Department of Housing and Urban Development (HUD).

This current loan volume continues a steady uptrend for the industry each year since 2001. Most recently, loan production has grown from 43,131 in FY 2005 to 76,351 in FY 2006 before climbing to 107,558 in FY 2007. The Homeownership and Economic Recovery Act of 2008 may have dampened growth temporarily as it is likely many prospective borrowers have been waiting for HUD to implement new provisions that among other things will allow borrowers to receive a higher benefit and pay a lower origination fee.

**pallavi** · 02-11-2010, 12:15 PM

hey its confusing for me too.. can someone explain??

**matthew** · 02-11-2010, 05:39 PM

people are willing to trade there equity in so they can spend there cash now.. with our population growing older no kidding its become more used.

**Makati Condos** · 02-11-2010, 11:48 PM

Reverse mortgages have helped hundreds of thousands of homeowners improve their quality of life in retirement. M&T Bank tries to ensure its customers fully understand how reverse mortgages work and whether one is right for them.However it has advantages and disadvantages:

Advantages:

Quality of Life
Independence
No Monthly Mortgage Payments
Easy Qualification
Tax-Free Money

Disadvantages:

It's still a loan
Closing cost
Although Unlikely,Government Benefits Could Be Affected
Limitations on Tax Deductibility
Property / Age Qualification Limited

**jimmykerr** · 02-23-2010, 03:31 PM

Basically, a lot of retired people have their house paid off, or have a lot of equity. They get income from a retirement fund and social secuirty, but if they do a reverse mortgage they can get more income to enjoy their last few years. Instead of leaving everything to their kids, they get to enjoy the money form the equity they have built up.

**Display Houses** · 02-24-2010, 12:28 AM

A reverse mortgage (or lifetime mortgage) is a loan available to seniors, and is used to release the home equity in the property as one lump sum or multiple payments. The homeowner's obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves

http://en.wikipedia.org/wiki/Reverse_mortgage

**rushdelivery** · 02-25-2010, 05:47 AM

Good information about mortgage. Thank you for sharing your ideas guys. It helps me a lot.

**tanmaysnv** · 03-03-2010, 02:47 PM

Hi
I think the reverse mortgage is just like any other loan, however only the senior people are eligible to take one. It is a government plan to help senior tide over financial crisis by using the allowing then to access the excess equities on their home.
Thanks !!!!

**Suki** · 06-18-2010, 08:56 PM

I think if you need a reverse mortgage, then take it. However, if you are lucky enough to have your house paid off 100%, don't do it unless you're financially suffering without it. It's like a line of credit against your house. If you can't pay it back, your house is collateral. It could turn out bad.

**Selvaraj** · 07-07-2010, 10:39 PM

A reverse mortgage is a loan that allows people ages 62 and up to get the money they need for any expenses they may have. Unlike traditional mortgages, there are no monthly payments on a reverse mortgage. The reverse mortgage is not paid until the person who took out the mortgage moves, sells the home or passes away. At that time, the reverse mortgage is paid out of the proceeds of the home sale.