A Reverse Mortgage is designed specifically for senior home owners to help them benefit from the equity they have built in their home without having to sell their house or make payments. The loan can be funded through a lump sum payment, monthly payments or even a line-of-credit. One of the primary advantages to a reverse mortgage is the loan does not have to be paid until the homeowner sells the property, moves or passes away.
In addition, the money received from the loan is not considered taxable income, nor is it considered in determining Social Security or Medicare benefits. The elderly homeowner is secure in their home even if the loan term ends or the loan grows beyond the value of the property. You can learn more about reverse mortgages with the AARP reverse mortgage calculator.
While Reverse Mortgages have received bad press in recent years, it's not a scam and they're not evil. Read more about reverse mortgages at the AmeriFirst blog.