In a nutshell, if you are a homeowner and over the age of 55, you can access up to 55% of your homes equity and receive the funds in two basic scenarios; a one-time lump sum payment or monthly payouts.
Many people are using their reverse mortgage to enter into early retirement, pay off debt, increase their investment portfolio or help loved ones enter the housing market. If you have children, you may have a plan set out for what they will inherit. How rewarding would it be, to help them now, rather than later.
As with standard mortgages, there are some fees involved with obtaining a reverse mortgage. These include; an appraisal of your property, legal advice, closing costs and administration fees. And most importantly, a reverse mortgage also allows you to maintain ownership and title and control of your home, but keep in mind, the lender would be listed on title as a first mortgage.
The mortgage amount is only payable when you sell or move, and is based on the original principle balance plus accrued interest. Historically, your equity in your home will continue to grow, and is usually higher than the interest accrual.
Contact your financial institution to see if a reverse mortgage may be the right decision for you or your parents.