What Is a Reverse Mortgage?

Article submitted by Anthony Accavallo, President of Federal Mortgage & Investment Corp.
For more information, he can be reached at 800-788-1184.

A reverse mortgage is a special kind of mortgage loan for seniors. The borrower and co-borrower must be at least 62 years old to qualify. It is a safe, easy way to turn your home equity into tax-free cash. Unlike a home equity loan, you do not have to make monthly payments. Instead, a reverse mortgage pays you. More importantly, you do not have to repay the loan for as long as you live in the house. It's a great way to keep your home and get money from it at the same time.

The name "reverse mortgage" describes exactly what the mortgage is – it is the exact opposite of a conventional mortgage. That is, with a conventional mortgage the borrower pays the lender but with a reverse mortgage, the lender pays the borrower.

In the past, a senior citizen in need of money would have to take out a loan against their house and immediately start making monthly payments again or sell their home. But a reverse mortgage allows seniors to borrow against their equity they already have in their home... and they never have to make a monthly payment.