Reverse mortgages allow older homeowners to turn part of their home equity into tax-free cash, using a loan that doesn’t have to be paid back until they die, sell, or move out.

That sounds good to a lot of seniors navigating the financial fallout of the novel coronavirus pandemic. Stay-at-home orders may have taken away jobs needed to make ends meet, while low interest rates and a volatile stock market have endangered income from retirement savings.

A reverse mortgage could be exactly the right tool at the right time. Or it could be an expensive mistake. It’s important to understand exactly how these loans work and to explore alternatives before you commit.

Revere mortgage basics

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs), which

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