Your Questions About Reverse Mortgage

Richard asks…

Can anyone explain what a reverse mortgage is and if it’s a good idea?

I heard that it’s good if you have no children to leave anything to. Any help will be greatly appreciated..Thank You!
Thank you all…very informative info…I have no debt and I have no children to leave it to. My extended family will still receive a substantial amount without the house. Do these facts make it a better idea?

admin answers:

Reverse mortgages can be an excellent income solution for retirees with very specific needs. They are obviously not for everybody, however. I would consider it as last resort. If you want to bequeath to you heirs it’s probably not the best idea.

“The purpose of a reverse mortgage is to have an added source of income, especially if you plan on selling your home near the end of your life or after you die. It allows you to receive the equity from your home and enjoy it in retirement. The amount you receive in the reverse mortgage is based on the value of your home, current interest rates, and your current age. Once you’ve received the amount your home has been determined to be worth, less any fees charged by the lender, you then owe that amount to the lender. You can pay that back any way you wish, but in many cases, the idea is to sell your home and repay the debt. Often, this is done by an estate after a person passes away and still has debt. As long as you’re permanently living in your home, you don’t have to pay the lender back.”

See this Reverse Mortgage Article for more detail on how they work:

Paul asks…

How can I get a monetary hand in the Reverse Mortgage business if I am not a licensed broker?

admin answers:

Depends on your state. Get a salesperson’s license and work for a licensed broker who has the connections with the reverse mortgage lenders and HUD. If you don’t want to get a license, then work as an employee for a bank. Or work for one of the internet shops and work across state lines.

Laura asks…

What is a reverse mortgage and do you advise it as a retirement option?

My friends were looking into getting one and I did not understand what it was. It sounds like it isn’t much different than a “second mortgage” that you receive in payments instead of in one lump sum, paying interest on this loan all the while. Correct?

admin answers:

A reverse mortgage can be a good source of income for someone who needs addtional money and can’t get it from anywhere else. Your home equity is used as income. You do not make monthly payments you receive them. Sometimes you can also get a lump sum if needed.

Maria asks…

Reverse Mortgage value Bankers will consider?

I purchased a flat in 2005 for Rs. 20 lakhs and now in 2008 the market value for the same is almost doubled in our area.

What value will the Bankers take for consideration-will it be purchase value or market value?

admin answers:

In the US a year after purchase the purchase price makes no difference anymore. They would only consider the current market value (for good or bad).

I don’t imagine your country would be much different.

William asks…

How does a reverse mortgage work?

admin answers:


I’d be glad to send you a lot of information about reverse mortgages but here are the basics. It’s an FHA loan for only people 62 years or older. You can get out 45%-75% of your home value depending on your age. The older you are the more money you receive. It’s similar to a home equity loan but the biggest difference is that with a Reverse there are no monthly payments to make. The lender is willing to wait 20-30 years for the borrower to either pass away or move from their home in order to get paid back. It’s much safer than a home equity loan because there are no monthly payments to add on or fear of foreclosure because payments have been missed. You can receive your money in a lump sum, monthly payments, a line of credit (with a growth rate of about 7% right now), or a combination of all three. There are no income or credit requirements. You are still the owner of your home and remain on title just like you would with any other kind of loan.

The only drawback to it is that you don’t leave 100% of your equity to your heirs.

If you have a current mortgage a reverse can pay off your current mortgage and you receive the remaining money you qualify for thus eliminating your monthly mortgage payment on the current loan.

I hope that answers the basics. I specialize in reverse mortgages and would be happy to send you an information packet we have. You should also check out these websites.

Our company is the largest originator of reverse mortgages in the Southwest and we are licensed in almost every state. I’d be more than happy to help you with any questions you may have. Feel free to respond back to this post or you can email me direct at

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