Risk To Heirs Gone With Reverse Mortgages
KCRA.com, October 30th, 2006
Elderly homeowners have plenty of equity in their homes once their
mortgage is paid off, but for those who live on a fixed income, paying
for anything outside of normal expenses can pose challenges.
Reverse mortgages can offer senior citizens a way to solve the house-rich, cash-poor dilemma without risk to their heirs.
Reverse mortgages allow homeowners to turn the value of their home into
cash, and they don’t have to pay back until they die, sell the home or
permanently move from the house, according to AARP.com. Browyn
Belling, the AARP Foundation’s reverse mortgage specialist, said the
loans are a relatively new way to tap into home equity for those who
are 62 and older.
In a conventional “forward” mortgage,
homebuyers borrow a lump sum and make monthly payments, reducing the
principal and interest over time. But with a reverse mortgage, there
are no monthly payments.
“You don’t have to pay anything back for
as long as you stay in your home; 85 percent of our survey respondents
want to stay in their homes. Reverse mortgages let them tap that
equity,” Belling said.
Read more of this Article. Learn more about Reverse Mortgages.