You may have heard about a mortgage called Reverse Mortgage. what is that?? we will discuss it now.

A reverse mortgage (known as lifetime mortgage in the United Kingdom) is a loan available to seniors (62 and older in the United States), and is used to release the home equity in the property as one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (e.g., into aged care). A reverse mortgage is analogous to an annuity where the principal and interest are paid with homeowner’s equity. Now here is how these work. A reverse mortgage you have a loan against your home only difference between this loan and the traditional mortgages is with a reverse mortgage you are not required to make payments or pay the loan back, that is as long as you are living in that house

Reverse Mortgages are hot items these days. Demographics, inadequate retirement funding, and problems in the traditional mortgage market have combined to make marketing of reverse mortgage products to senior homeowners a booming business.

First to know more about reverse mortgage, we need to learn about what’s the different between reverse mortgage and conventional mortgage? In a conventional mortgage the homeowner makes a monthly amortized payment to the lender; after each payment the equity increases within his or her property, and typically after the end of the term (e.g., 30 years) the mortgage has been paid in full and the property is released from the lender. In a reverse mortgage, the home owner makes no payments and all interest is added to the lien on the property. If the owner receives monthly payments, or a bulk payment of the available equity percentage for their age, then the debt on the property increases each month.

To know more about it, and how to work, here we could use reverse mortgage calculator.