Reverse Mortgages Can Provide Liquidity Solution

Everyone would like to have unlimited resources at their disposal to address any and all situations that may arise during their golden years, through their twilight years, and up until the day of their passing. There are some who can indeed comfortably weather every storm with nary a blip on their financial radar screen, but the majority are not in this position. Even if you have been successful throughout your life there may come a time when you need to identify a source of ready cash, and for some, a reverse mortgage is a viable solution.

As it names suggests, a reverse mortgage works in "reverse" of a regular mortgage: the lender makes payments to you as the homeowner in return for equity in the home. These payments can be incremental, on-demand in the form of a line of credit, in a lump sum, or in a combination of these possibilities. To qualify you must be at least 62 years of age and own your home outright or have a significant amount of equity in the property.

No payments from you are due or expected while you are living in the home so you can't be foreclosed upon. You are required to keep the property taxes and insurance up to date, you must live in the home as your primary place of residence, and you must keep the property in adequate condition. If you fail to do so the loan can be called in, but that is the extent of the risk involved.

Home Equity Conversion Mortgages ("HECMs") are backed by the federal government so they are completely legitimate. To underscore this point, you have to go through a consultation session with a

U.S. Department of Housing and Urban Development approved counselor before you can take out an HECM.

The loan term ends when you pass away or choose to move from the home. Most borrowers or their heirs sell the house to pay the loan, but you can use another source of funding and keep the home if you so desire.

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