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Alfredo Said:

What is a reverse mortgage?

We Answered:

A reverse mortgage is a mortgage in which the bank pays you for life instead of you paying them. These loans are only given to homeowners whose property is completely or mostly paid off, and all the people who own the home have to be over a certain age (70, I believe).

The payments you receive are tax-free, but make no mistake -- this is a loan against the value of your house. You don't have to pay anything while you are still alive and living in your house. But if you should move away or die, the loan becomes payable. This means the house would have to be sold and the bank will get some or all of the profits.

Reverse mortgages have a lot of up-front fees, so they're not right for everyone. For senior citizens who are house-rich, cash-poor and intend to stay in their homes for life, these loans can be a great idea.

[edit] You're welcome, John! I'm glad I could help. A reverse mortgage would probably not be a good idea for people who want to leave property to their heirs.

Jerry Said:

How can I reverse my mortgage payment and have most of my money go to my priciniple instead of intererst.?

We Answered:

can't do one without the other. reverse your mortgage and you no longer own the house.
pay extra principal and your payments will have less going to the interest side.
to replay to your last query, it's the price you pay to borrow a large sum of money. if you had 100k, you would not have to borrow so much or any and would save on interest.

Vernon Said:

Can anyone explain what a reverse mortgage is and if it's a good idea?

We Answered:

Reverse mortgages can be an excellent income solution for retirees with very specific needs. They are obviously not for everybody, however. I would consider it as last resort. If you want to bequeath to you heirs it's probably not the best idea.

"The purpose of a reverse mortgage is to have an added source of income, especially if you plan on selling your home near the end of your life or after you die. It allows you to receive the equity from your home and enjoy it in retirement. The amount you receive in the reverse mortgage is based on the value of your home, current interest rates, and your current age. Once you’ve received the amount your home has been determined to be worth, less any fees charged by the lender, you then owe that amount to the lender. You can pay that back any way you wish, but in many cases, the idea is to sell your home and repay the debt. Often, this is done by an estate after a person passes away and still has debt. As long as you’re permanently living in your home, you don’t have to pay the lender back."

See this Reverse Mortgage Article for more detail on how they work:
http://www.themoneyalert.com/ReverseMort…

Hector Said:

can you explain a reverse mortgage?

We Answered:

A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month. The cash you get from a reverse mortgage can be paid to you in several ways:

all at once, in a single lump sum of cash;
as a regular monthly cash advance;
as a "creditline" account that lets you decide when and how much of your available cash is paid to you; or
as a combination of these payment methods.

No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older.