CHAPTER 20
Mortgages—In Reverse 쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆쏆
“A conventional mortgage will turn your income into equity, while a reverse mortgage will turn your equity into income.”
Do I Need to Read This Chapter? ●
Am I house-rich but cash-poor?
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Do I need income during retirement?
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Am I aware of the advantages and drawbacks of reverse mortgages?
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Do I realize that such mortgages offer a variety of payment plans?
n the previous chapter, we discussed the conventional mortgage. Let’s reverse the topic and take a regular mortgage and stand it on its head. In other words, rather than borrowing a lump sum of money and paying it back monthly, let’s get the entire loan in a lump sum or in monthly payments sent to us; and then we’ll pay it back only if we sell the house or, better still, have our heirs pay for it at the time of our demise. In other words, you can live in your house for the rest of your life, receive monthly income or get payments anytime you want, and have your estate pay for all this after your death. It costs you nothing! The growth of RMs has been phenomenal. In 2001, only 8,000 were accepted, in 2005 over 48,000, and in 2006, 86,000 RMs were transacted.
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