Reverse Mortgage
She is interested in receiving monthly
payments from the equity that she has acquired in her mortgage-free home
to supplement her modest income during her senior years. I understand
that there is a mechanism for doing this and it is called a reverse
mortgage. Can anyone steer me to a source to obtain reliable information
about such a financial instrument?
For those who own their own home, with no mortgage, there's a loan to allow
them to cash in on its equity: the reverse mortgage, or RM. While there
are several variations, it basically lets a lender make payments to the
borrower for a few years. At the end of that time, the borrower is expected to
repay the money with interest, generally by selling the home. Some variations
on this theme allow a greater annuity by sharing the home's appreciation with
the lender. RMs are still fairly uncommon; "Other Sources of Information"
tells how to get details.
Reverse Mortgages
Dept. of Housing & Urban Development Reverse Mortgage Hotline:
800-245-2691. Some lenders offer FHA-sponsored Reverse Mortgages; call here
for the names of local lenders.
Consumer's Guide to Home Equity Conversion, American Assoc. of Retired
Persons, Washington DC 20049. An excellent 44-page book.
National Center for Home Equity Conversion, 110 E. Main St., Madison WI
53703. A clearinghouse of RM information.