Reverse Mortgage Supplemental Retirement Financing Strategy
13 August 2008
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A reverse mortgage is a loan for senior citizens. It is often used to cover medical expenses, and is becoming a common way for retired persons to supplement their existing monthly retirement income.
This is a loan that senior home owners may take against their current home. You don’t need to pay monthly installment in this type of loan. Instead, the lender will pay for you. You will pay the loan back from your equity when you’ve left the home either by selling it or passing away. Your children can keep your home by paying the loan back with interest if they don’t want to sell it.
The concept of reverse mortgage is confusing to many and very often analogous with the conventional mortgage but they are quite different from each other. A conventional mortgage is a falling-debt and rising-equity transaction. But in the case of reverse mortgages, you will be given money by the lender and you will not make payment. So, it will result in a rising-debt and falling-equity model. This is a perfect
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