What is a reverse mortgage loan
A reverse mortgage loan is a tool of finance that enables the senior homeowners to cash in on the equities of their homes. These loans let the seniors borrow a part of the equity of the home. This amount is repaid by the seniors when they sell the house, cease to live in the house or die. In order to get the reverse mortgage loan, the borrower has to be of a minimum of 26 years and should have a house or have a little amount of mortgage balance remaining.
The design of these loans are done in a way that helps the senior citizens get a chance of eliminating the payments of mortgage and add it to the retirement income. There are three basic categories of the reverse mortgage loans. There are proprietary loans, home equity conversion mortgages and single purpose loans. Each of the three types can be beneficial in appropriate circumstances.