Reverse Mortgage Programs

With a Reverse Mortgage seniors keep the title to their house, receive payments and maintain the reverse mortgage as long as they live in the house and are never required to make payments on the reverse mortgage loan.

There are several reverse-mortgage programs. The most popular is the Home Equity conversion Mortgage, backed by the Federal Housing Administration (search "reverse mortgages" at www.hud.gov). Usually the senior will be offered four payout choices: a lump sum, an interest-earning credit line, monthly advances paid directly into the senior's designated account over a period of time, or smaller monthly payments that last as long as the senior lives in their home.

Many seniors prefer to roll the costs of their reverse mortgage into their loan. The senior or their heirs get to keep whatever equity has built up since the senior took out the mortgage. If the value of the house falls below the loan amount, the lender absorbs the difference.

If a senior chooses to leave their home for one or more years the reverse mortgage will need to be paid. Seniors or their heirs my either sell the house or pay the money back including the accrued interest.