Reverse Mortgage
The Complete Guide to Reverse Mortgages: Turn Your Home Equity into Instant Income!
by Tyler Kraemer

This book was so helpful in informing myself and my parents as to the options available for them. It was easy to read and easy to understand. It gave many helpful hints and helped us figure out if a reverse mortgage was approriate for them.

It is essential if you or someone in your family is considering, or wants to learn more about, a reverse mortgage loan. It walks you through the process from borrowing to repayment in a conversational, easy-to-read format. You can read about real life situations that are very helpful for you to see how a reverse mortgage can work for you.

The book provides precise information on each of the types of reverse mortgages that are available. You will find information about the ways in which you can receive your payments, and all of the incumbent fees and costs that may come with this kind of loan are revealed. It outlines how to protect yourself and how you are already protected. Checklists are provided covering all the points to consider before making each decision, such as how to choose a lender.


Reverse Mortgage - Reverse Mortgage Explained

Reverse Mortgage * Reverse Mortgage Explained

Reverse Mortgage Explained   
Ken Chukwell

Can't remember how many times I've been asked "What is a reverse mortgage"?

Reverse mortgages are a great way to get a loan using your primary asset. As in all cases of financial lending, the flexibility comes at a price. A reverse mortgage is a loan using your house and is referred to as a "rising debt, falling equity" kind of deal.

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To compare reverse mortgage to a more traditional one, the type of mortgage commonly used when buying a house can be classed as a "forward mortgage". To qualify for forward mortgage, you must have a steady source of income. Because the mortgage is secured by the asset, if you default on the payments, your house can be taken from you. As you pay off the house, your equity is the difference between the mortgage amount and how much you've paid. When the last mortgage payment is made, the house belongs to you.

On the other hand a reverse mortgage process doesn't require that the applicant have great credit, or even that they have a steady source of income. The major stipulation is that the house is owned by the applicant. Generally, there is also a minimum age required as well, the older the applicant, the higher the loan amount can be. As well, reverse mortgages must be the only debt against your house.

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Differing from a conventional "forward mortgage", your debt increases along with your equity. Instead of making any monthly payments, the amount loaned has interest added to it - which eats away at your equity. If the loan is over a long period of time, when the mortgage comes due, there may be a large amount owed. Furthermore, if the price of your home decreased, there may not be any equity left over. On the flip side, if it was to increase, this could allow for an equity gain, but this isn't typical of the marketplace.

When deciding how to draw money from the reverse mortgage, there are a few options; a single lump sum, regular monthly advances, or a credit account. There are conditions in this kind of mortgage that would warrant the immediate repayment of the loan; the mortgage will be due when the borrower dies, sells the house, or moves out.

Failure to pay your property taxes or insurance on the home will undoubtedly lead to a default as well. The lender also has the option of paying for these obligations by reducing your advances to cover the expense. Make sure you read the loan documents carefully to make sure you understand all the conditions that can cause your loan to become due.

Hope this helps clear up the term reverse mortgages.

Ken Chukwell

P.S. You have permission to use this article at your website as long as the author's bio lines are included, with the live links pointing to author's website and the article is not altered in any way.

Ken Chukwell is a personal finance enthusiast whose website is dedicated to quality information on everything online loans. For indepth information and for all your online loan needs please visit

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Index of Articles about Reverse Mortgage

What Other Authors say about Reverse Mortgage

Mortgage vs. Reverse Mortgage- How do You Put Your Mortgage in Reverse? by John R. Blakefield

Many people look at the process of a mortgage and wonder how exactly do you put your mortgage in reverse?In order to understand a reverse mortgage, let's first investigate at a normal mortgage for a first...

Is a Structured Settlement Reverse Mortgage Right For You? by Mayoor Patel

One of the ways to create a steady supply of income in selected situations is to enter into a structured settlement reverse mortgage. This is primarily an option for persons who own property that is paid...

How To Choose The Right Type Of Mortgage by Bob Backstrom

A house is an important investment in your lifetime. Besides meeting your basic need of providing shelter, it can also provide you a source of cash if you have no other source of income. A loan taken to...

Frequently Asked Questions for Reverse Mortgages by Barry Waxler

A red hot loan package that is getting a lot of attention these days is the reverse mortgage. Common question arise regarding the loan, so let's take a closer look.The reverse mortgage is a form of negative...

New reverse-mortgage option welcomed by lenders by Tamarind Phinisee

On Nov. 8, Texans voted yes on a ballot referendum item that called for amending the Texas Constitution that allows lenders to offer reverse mortgages as lines of credit. Scott Norman, president...