Reverse Mortgages

Explore the benefits and considerations of reverse mortgages, a financial tool designed for homeowners aged 62 and older. This guide explains how reverse mortgages allow you to convert your home equity into tax-free income without selling your home. It covers various payout options, eligibility requirements, and the tax implications, providing valuable information for those seeking additional retirement income or financial flexibility.

Highlights:

• Tax-Free Income: Payments received from a reverse mortgage are not taxable.

• Use of Funds: Can be used for home improvements, paying off existing mortgages, or supplementing retirement income.

• Eligibility: Must be 62 years or older, own the property outright or have a small mortgage balance, and occupy the property as the principal residence.

• Loan Repayment: The loan is typically repaid when the home is sold, the owner dies, or the owner no longer lives in the home for a specified period.

• Risks: Includes accumulating interest on the loan balance, potentially high closing costs, and the impact on inheritance.