All In: Taking Out a Reverse Mortgage

Homes paid for through mortgages usually hold equity, and the values for this figure build over time. Homeowners that reach a ripe old age can borrow the amount of equity their houses have accrued in the form of a reverse mortgage. As its name implies, a reverse mortgage makes it seem like it’s the lender’s turn to pay back the borrower.

To take out a reverse mortgage, homeowners need to meet strict requirements put forth by the industry. Aside from an age restriction that only allows those 62 years old and above, the borrower also needs to have the means to pay off any remaining loans or has already fulfilled his debts. The property of the individual taking out a reverse mortgage must naturally be under the ownership of the borrower, and it should also be the primary residence.

Reverse mortgages will be at considerable cost, yet they can be properly managed with care. Even after the loan has been taken out, borrowers have to continuously qualify for the loan. Despite these limitations, reverse mortgages are incredibly useful in a pinch, and can further increase the financial security of a household. Notably, reverse mortgages can also be used to pay off outstanding debts in an emergency.