Women's finance - making smart financial choices
Your source for women's finances & financial advice
Free Budget Club Free Worksheets Message Boards

New Page 1

Sponsor: FREE money for college!


Reverse Mortgages 

If you are short on cash and big on home equity, a reverse mortgage could be beneficial. A reverse mortgage converts the equity in your home into cash. It works the opposite way a regular mortgage does, instead of you paying the lender each month, the lender sends you payments based on your loan, either in a lump sum, monthly, or as a line-of-credit. 

There are three types of Reverse mortgages, insured, uninsured, and FHA, and there are fixed and adjustable interest rates. You may also have to pay origination fees, closing costs, and insurance premiums. Most service charges can be financed into the loan, which of course increases the overall costs of the loan. 

The loan is paid back when you sell your home, die, or reach the end of the loan term. If you die your heirs must repay the loan either by refinancing into a forward mortgage, or by selling the home. Since the loan uses your equity, there may be little left for your family, so this should be considered.

There are some advantages to using a reversed mortgage as income. The loan advances are nontaxable so they don’t affect Social Security or Medicare benefits. If you receive Supplemental Security Income they don’t affect your benefits as long as you spend them within the month you receive them, and it’s usually the same for Medicaid (check with local authorities). The interest on the loan isn’t tax deductible until you repay some or all of the loan off.

Tell a friend about this site

Home
Budgeting
Mortgages
Auto Loans
Credit & Debt
Marriage
Credit Repair
Bankruptcy
Banking
Education Savings
Retirement
401K Retirement
IRAs Retirement
Stocks
Mutual Funds
Taxes
Travel Finances
Health Insurance
Life Insurance
Auto Insurance
Financial Calculators
Kid's Financing
Quiz Time
Free Worksheets
Budget Challenge
Message Boards






Contact Us     Privacy     Reprints

Copyright 2001-2002  Motherhood Media, Inc., All rights reserved.