Traditionally, these loans have been used primarily for the purpose of refinancing a home that an elderly person resides in – elderly being someone age 62 or older. Although, that age 62 person might challenge being referred to as elderly.
Nonetheless, the person age 62 or older can utilize this loan product to be able to accomplish several tasks, here are a couple of examples as a refinance:
1) That person who is retired and still has a mortgage to pay each month on a fixed income, could now cease paying that monthly principal and interest payment and now breath a bit easier as the monthly outgo is now reduced. Just because one is retired and on a fixed income, it does not mean food, gas, medicine and insurance costs stay in a fixed position. So, the REVERSE Mortgage simply makes living, easier.
2) For the Parent that wants to gift cash to a child while the parent is alive and able to see that smiling face when that child buys a boat or a house
with that cash, this is the perfect way to access big dollars and NOT remove the money from one’s bank account or pension.
Now, the REVERSE Mortgage can be used to Purchase a home. If you are a person who is age 62 or older and you want to sell your current home, yet keep some cash from the sale and only move a small portion of the cash toward the down payment of the next home and NOT have a monthly mortgage payment while in retirement or maybe you are still working – then, this is the plan for you !!!
You still need to pay your property taxes and insurance premiums, but the Monthly principal and interest payments are NOT to be PAID. Now, some people have had the mistaken belief that the REVERSE Mortgage means the bank owns your home and you do not – this is NOT true. With a REVERSE Mortgage you own the home !!! You as the owner can still sell that home, refinance that home and will the home to your children.