By myfloridalegal.comSource: Source: The Florida Attorney General’s Office
A reverse mortgage allows consumers 62 or older to supplement their income by converting home equity into cash. While reverse mortgages may sound like a great deal, they are not suitable for everyone. Consider the following before deciding to take out a reverse mortgage on your home:
Understand how reverse mortgages work.
A reverse mortgage converts the home’s equity into cash payments to the homeowner. You keep title to the home but borrow against its equity. The money received from the lender usually comes in the form of monthly payments or a lump sum and is generally tax-free. The loan does not have to be paid back as long as you live in the home. However, the loan will become due when you die, fail to pay taxes or insurance for the home, let the home fall into disrepair, or sell the home or no longer use the home as your primary residence. The lender cannot sue you or your estate for the loan balance, but it can sell the home. Never let a lender pressure or rush you through the process. Be sure you understand the features and total cost of a reverse mortgage before signing anything.
