A Reverse Mortage works like a forward mortgage with a few key differences:
1. Instead of paying interest each month the interest is added to the balance of the loan.
2. You have the option of making no payment, an interest-only payment, a principal and interest payment, or any amount you wish depending on your situation.
3. You may qualify for a line of credit on top of not having a payment each month.
4. You may be able to have your equity pay you each month as long as you live in your home.
Does a Reverse Mortgage Make Sense?
A Reverse Mortgage (aka HECM Home Equity Conversion Mortgage) is a great option if you are within the following guidelines:
1. You have a lot of equity, but have difficulty qualifying income-wise to utilize your equity.
2. Your social security or retirement income is not sufficient to be able to cover the cost of living.
3. You want the flexibility of being able to choose how much you want to pay each month on your loan and have the option to pay nothing.
4. You want to supplement your income with a payment from your equity each month.
5. You are concerned your spouse may not be able to afford the mortgage or other expenses should something happen to you.
6. You want to have a credit line that you can access, but don't want to be tied to a payment each month.
​
If you fall under any of these categories we can see if you qualify for a Reverse Mortgage and if it is right for you.