A reverse mortgage is a home loan that enables older homeowners to access equity for conversion into cash that can be used for any purpose. As long as the home remains owner-occupied, there are no monthly mortgage payments. The borrower always retains ownership of the property and is therefore responsible for paying property taxes and other property related charges, maintaining adequate insurance, and maintenance on the home. There are fixed rate and adjustable interest rates and payments options available.
A reverse mortgage is an important component of a retirement cash flow management plan. It enhances homeowners’ ability to fund their longevity while being able to age in place in the comfort of their home. The reverse mortgage can also be used to fund the purchase of a new principal residence for those who are interested in down-sizing or relocating.