Reverse mortgages are becoming an increasingly popular loan option for many homeowners. These types of loans used to be solely for elderly senior citizens as a means of cashing in on the value of their homes. Now that reverse mortgages have been popularized, many younger homeowners are using the loans to supplement their retirement income.
Reverse mortgages can be taken with a variety of payment options. These options include monthly payments, a lump sum payment, equity lines of credit, or a combination of the previous options. Reverse mortgages are not repaid to the lender until the homeowner dies or moves from the property, and the homeowner retains title of the property.
Mortgage lenders report demand for this type of mortgage loan has been doubling each year; however, the pace has slowed slightly due to the mandatory class homeowners must undergo before loans can be approved. The class is provided by the Department of Housing and Urban Development.
There are no restrictions on uses for the money; many homeowners make repairs or home improvements, pay off bills, or use the money for medical expenses. The best part about using a reverse mortgage is that it allows you to tap into the equity in your home without tax liability; however if you plan on moving this is not the loans for you.