Archive for the Reverse Mortgages Category

What is a reverse mortgage?

A reverse mortgage is well named:  it is the reverse of a mortgage.

With a traditional mortgage, you have to pay it to keep your house.  With a reverse mortgage, it pays you so that you can keep your house.

A reverse mortgage can help senior homeowners stay in their home.  Here in New Jersey, the cost of property taxes and home maintenance may be too high for seniors on a fixed income.  One solution to this problem is to get cash from the equity in the home.

If a senior takes a home equity loan to get cash from the home, he or she still must pay that loan back each month thus raising his or her costs even more.

A reverse mortgage is different.  It allows a senior to get cash from the equity of the home without having to pay it back until the house is sold or the senior dies.  Therefore the cash can be used to pay ongoing expenses and stay in the home longer.

Cash from a reverse mortgage can adversely affect other senior benefits such as Medicaid or a veteran’s pension.  So an elder law attorney should be consulted.

The National Council on Aging is a federally approved counselor on reverse mortgages. It has written a useful guide for older homeowners entitled, “Use Your Home to Stay at Home.” For more information and to have your questions answered, visit their website here:  NCOA’s website