Straight Talk on Reverse Mortgage Procedures
The Jewish Exponent, May 25th, 2006
A reverse mortgage can be a powerful tool for converting home equity into cash
that can help you make ends meet. However, reverse mortgages also present some
financial risk.
The following information, provided by the Pennsylvania Institute of
Certified Public Accountants, can help you determine if this financial
strategy is right for you.
• How They Work. Reverse mortgages work like traditional mortgages,
only in reverse. Rather than paying your lender each month, the lender pays you.
These payments are cash advances against the equity in your home.
The maximum amount that can be borrowed is usually based on the age of the
homeowner, the appraised value of the home and the current interest rate.
Generally, the more equity you have in your home, the older you are, and the
lower the interest rate, the more you can tap into it for cash.
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