Reverse Mortgages

Paper Summary:

This paper examines the reverse mortgage, which is a group of loans that is not dissimilar from a home equity loan except that it is designed for people at the age of retirement. The author explains how reverse mortgages work and discusses the advantages and disadvantages of taking up a reverse mortgage. In closing, the paper cautions that no reverse mortgage or other loan should be entered into without the consultation of a valued financial advisor and without the knowledge of primary potential inheritors, who may need to understand how to resolve the loan at the close of its terms.

From the Paper:

"Reverse Mortgage is a group of loans, similar to a home equity lone that is designed for people above the retirement age (62+) that have a clear mortgage or a very low remaining balance on that mortgage and live in the home. The loan is structured like a home equity loan, excluding that you can never owe more than your home is worth, in many cases the loan is not paid back but is paid back with the equity of the home when the home sells upon evacuation by the owner and there is a fixed cap depending upon value and area which excludes those with very valuable homes from borrowing much more than those with average valued homes."

Sample of Sources Used:

• Carr, M. Anthony. "Reverse Mortgages Can Trap the Unwary." The Washington Times 10 Sept. 1999: 13.
• Cocheo, Steve. "Reverse Mortgages Shift Up a Gear." ABA Banking Journal 88.10 (1996): 77.
• HUD Website "About Reverse Mortgages" (2006). http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm

More papers on Reverse Mortgages:

• Comparison Essay # 128340 : "Reverse Mortgages"
• Essay # 137313 : "The American Association for Retired Persons"
• Research Paper # 104659 : "Home Ownership for Low-Income Households"

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