Reverse Mortgages
A reverse mortgage, also sometimes called equity conversion,” can be a source of funds. Reverse mortgages enable homeowners to use the equity in a home as security for a loan, paid to them as monthly payments or in a line of credit, to be called on as needed, up to the approved limit. The funds may be used for anything.
To be eligible, the homeowners—both spouses, if a married couple owns the home jointly—must be 62 or older and reside in their single-family home (which must be debt-free or nearly so). A HUD-approved condominium is also eligible for the program.
A reverse mortgage isn’t appropriate for everyone. Closing costs and fees can be quite high. If you are considering a reverse mortgage, consult with a legal or financial expert you trust. Counseling about reverse mortgages is available from the Urban League. You can get more information from HUD (U.S. Department of Housing and Urban Development) at www.hud.gov. You may also obtain reverse mortgage information and order a 68-page guide, Home Made Money, on the AARP web site, or call 1-800-209-8085
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