Your Mortgage: Is it time to change into reverse?

Do you know that a mortgage works in two directions?

Which way is your mortgage going?

• A mortgage is for when you want to buy a house and have no money.
• A reverse mortgage is when you have a house and want to raise money.

What does that mean?

A reverse mortgage is a loan available to seniors. It is used to release the home equity in the property as one lump sum or by multiple payments. In other words, if you have a property that you own or is mortgaged, you can use it to raise money. A reverse mortgage could be thought of as an alternative to taking cash advance loans.

When will I pay it off?

Your obligation to repay the loan is deferred until you die, the home is sold, or you move on, say, into a retirement home.

Here's the difference

In a regular mortgage, the homeowner makes a monthly payment to the lender, and each payment increases your equity in your property. By the end of the term, often 30 years, the mortgage has been paid in full and the property belongs to you.

In reverse?

In a reverse mortgage, the home owner can choose to receive monthly payments or a bulk payment of the amount of equity that has accumulated from mortgage payments. The debt on the property will increase each month.

Why?

The reverse mortgage is becoming popular in America. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements or simply have a last 'splurge' - a Caribbean cruise? ... click here to read the rest of the article titled "Your Mortgage: Is it time to change into reverse?"