What Should You Know about a Reverse Mortgage for Senior Citizens

by Mary Ann
(Omaha, NE)

You see a lot of commercials on TV today about the benefits of reverse mortgage for senior citizens. In fact, my aunt and uncle are seriously considering it, but I encouraged them to do their homework and research both the pros and the cons of a reverse mortgage.


I was worried, despite the fact that it all sounded great on the television commercial. Is there a catch, or a down side to the process? I talked to a friend of mine who is a mortgage broker and asked about more details regarding the basic facts of reverse mortgages.

I found out that you have to be at least 62 years old to even qualify for a reverse mortgage, and that the owner/s is required to live in the residence a majority of the time. Most single-family or one unit dwellings are eligible, but mobile homes typically are not.

One of the benefits of a reverse mortgage is that you don't have to repay the loan right away. However, as I told my aunt and uncle, the loan does have to be fully repaid (and that includes interest as well as additional charges), if the owners sell the home, permanently moves away, or when one of the last living borrowers dies.

I also found out that because monthly payments are not required, the amount you owe can grow larger over time, reducing the equity in the home to smaller and smaller amounts.

The bottom line is that yes, reverse mortgage for senior citizens does provide some benefits, but you also have to be aware of the down side.

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Apr 08, 2015
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Reverse Mortgage for Seniors
by: Anonymous

This is a good article and I agree with the other posters. However, I would also caution the elderly to resist signing on the dotted line before they completely understand the stipulations as stated in the paperwork in order to avoid unpleasant surprises.

Apr 08, 2015
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Reverse Mortgage for Seniors
by: Anonymous

My grandmother got a reverse mortgage on her home and used the money to pay off her overdue property taxes. She paid off her home over 20 years ago, so she has a lot of equity built up in it. Still, she's careful not to tap into that money unless it's absolutely necessary.

Apr 08, 2015
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Reverse Mortgage for Seniors - Other Issues
by: Anonymous

I also looked into reverse mortgages, but it's important to make sure that they understand that they're still responsible for insurance, property taxes, and any repairs.

If these are not dealt with, the company who provided the reverse mortgage loan can cancel the loan and demand payment in full.

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