Reverse mortgages are becoming popular among the senior citizens. They give seniors easy money in lieu of the part ownership of their home.
If you want to go for a reverse mortgage, the information below will help you:
What is reverse mortgage?
For senior citizens above 62 years, lenders offer instant cash without any monthly payments. This allows the pensioners with a home, but no cash, to get easy financing to meet their daily needs or for any other purposes. This allows them to convert their equity tied up in their home into cash.
What are the advantages and risks of this type of mortgage?
This mortgage allows you to reside in your own home. You get monthly income which will help you maintain a comfortable standard of living.
The money generated is non-taxable since it is a loan and not income. In the short term, the advantages seem to be very attractive but in the long term the risks far outweigh the benefits. Unlike a conventional mortgage, in reverse mortgages the lender pays you money based on the equity in the home. But in return the lender imposes strict conditions on you. You get the mortgage only on the primary residence. So...
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