This was a new one for me, you guys. We visited Chris’ grandparents yesterday and I asked them about it, and apparently it’s more common than I realized. People over the age of 62 who own a home can get what’s called a Reverse Mortgage, meaning instead of them paying the bank monthly payments on a borrowed amount, the bank pays THEM. The catch is that when the borrowers move out of their home or pass away, the loan becomes immediately due.
From what Chris’ grandparents said, it’s a brilliant idea. Seniors have this piece of property with equity in it, and they can use that equity to get a lump sum or monthly payment they can use for living expenses, or to travel, or for whatever they need, and the property itself pays off the loan after they move out or pass away. Oh, and the income is tax-free! The loans are federally funded and insured, too. It sure seems like something worth looking into for someone over 62 who owns property. If you or someone you know might be interested in this, use a reverse mortgage calculator to get quotes from participating banks with no obligation.
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Reverse mortgages can be a real boon to any older person who may have been hurt financially by the economy.
I was not familiar with this until now reading about the reverse mortgage. Thank you for sharing this
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Oh, no, no, no. Before you decide that reverses mortgages are a great idea, please read what Dave Ramsey has to say about them. It sounds to me like they’re an awful idea. http://www.daveramsey.com/article/the-ugly-truth-of-reverse-mortgages/lifeandmoney_mortgage/