Patedepollo

Reverse mortgages do work somewhat like a conventional mortgage in reverse. The lender pays you, the homeowner, a monthly amount, which is considered to be a loan against the equity in your house. You do not sell the house—the house is your collateral. You do not have to repay this loan (and the accrued interest) until the end of a term that may run anywhere from five to fifteen years. The usual expectation is that the home will eventually be sold in order to satisfy the debt fully. (Any money left over goes to you or your estate.) The most obvious problem is that you could outlive the term of the loan and risk losing your house. Some innovative programs are finding ways around this hazard. For example, a New Jersey lender has provided for deferred repayment until age 100, with homeowner and lender both sharing the home’s appreciation.

Tags: business

This entry was posted on Wednesday, September 9th, 2009 at 10:53 pm and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.