When is a reverse mortgage paid? A reverse mortgage is a loan against your home that you are not required to pay back as long as you live there. The loan is repaid from the borrower’s estate or the eventual sale of the home when the last surviving borrower no longer lives in the home. Money can be received in a lump sum, monthly payments, or through a line of credit.

How do you qualify for a reverse mortgage? You must be 62 years or older to qualify and there are no income or credit requirements for a reverse mortgage. The amount you can borrow in a reverse mortgage is determined by your age, your home’s value and interest rates. The older you are, the more you can borrow.

Will I lose my home? The bank never takes over the deed unless there is a default. Defaults can occur if the taxes and insurance are not paid current or the homeowner doesn’t live in the home for a one-year period. (more…)

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Reverse mortgages, which enable seniors to borrow money against their homes that won’t get repaid until after they move out or die, can be useful tools. But they aren’t foolproof. These increasingly popular loans are also the subject of many consumer complaints.

The economy has changed in ways that could drive an increase in reverse mortgage fraud. The loans have been growing more popular as Baby Boomers look for ways to retire comfortably; 107,367 Home Equity Conversion Mortgage cases were endorsed for insurance from October to September 2007, compared to 76,282 in the comparable period of 2006 and only 157 in 1990, according to the U.S. Department of Housing and Urban Development. (more…)

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