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What is a Reverse Mortgage Loan?
A Reverse Mortgage Loan, also known as 'equity release loan, equity access or home equity conversion mortgage' is a financial process that allows seniors to convert the equity in their homes into cash - this loan is usully structured so that it is collected, including accrued interest and other charges, when the house is sold or after death.
The money can be used for home renovations, vacation, paying off debts, or daily living expenses. You cannot outlive the loan agreement and you cannot be forced to sell your home to pay off the mortgage.
Sounds great -however there are strict guidelines for qualification - including the age of the borrower, the location of the home, amount of equity, etc.
You also need to be aware of the cost - interest rates, originating fee, closing fee and service fee - these all apply and can vary.
Although Reverse Mortgages have been around for some time - they have not been fully understood. However, it is expected that as the baby boomers enter their retirement years they will have greater understanding and therefore less aversion to this way of self funding their retirement.
So - study all the latest news and articles this site provides - and you will be able to make an educated decision on whether or not a Reverse Mortgage Loan is right for you!
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