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Kurt Said:

What is reverse mortgage & how is it different from mortgage?

We Answered:

A reverse mortgage is specifically designed for the needs of seniors and keeping them in their homes, whereas a traditional mortgage is not structured for that purpose.

With a traditional “forward” mortgage, all the money is borrowed up front and paid off over time with monthly payments. Over time the mortgage balance decreases as each monthly payment is made.

With a reverse mortgage the money is borrowed over time and is not paid off until the borrower either permanently leaves the house or passes it on to their estate. No payments are made until then. With a reverse mortgage the bank pays the borrower versus the borrower paying the bank. The balance increases over time with a reverse mortgage.

Reverse mortgages are not scams. Reverse mortgages are a good thing that helps many seniors stay in their homes versus prematurely going to nursing homes, etc. Reverse mortgages by the way are also almost entirely misunderstood and the same false information is repeated again and again.

All the borrowers must be 62 years old or older. Unlike traditional mortgages, credit is unimportant as no payments are being made. You also do not need income to qualify for a reverse mortgage as you do with a traditional mortgage, as no mortgage payments at all are being made. The reverse mortgage gives the borrower income versus using their income to make mortgage payments.

Reverse mortgages also allow for life estates and trusts to protect the equity in the home from Medicaid reimbursement, which is not allowed with traditional mortgages.

For more information go to: http://www.mtgmortgages.com/reverse_mort…