Reverse mortgages are loans available to seniors age 62 or older that use the equity in a home to pay out a monthly stream of income until the death of the owner. When the owner dies, the home is sold with the lender being repaid the paid out funds plus interest with any leftover money being given to the estate. This option has been increasing in popularity in recent years to fund retirement for many since it provides guaranteed income while also allowing the borrower to keep their home. In recent years, new laws have been adopted at the state and federal level designed to protect borrowers by requiring, among other statutes, that they be able to afford to pay property taxes, insurance, and upkeep on the home before getting a loan. In addition, surviving spouses now have greater protection when it comes to retaining the home after the death of the borrower.
See Michael Lazar, New Reverse Mortgage Laws Should Positively Benefit Retirement Planning, Experts Say, Huffington Post, January 7, 2016.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
