Why Are There No Payments On A Reverse Mortgage
Many retired people live on a limited income. The only source of income many retired people have coming in is their Social Security payments, which may not be enough to sustain their lifestyle. The good news for these folks is that they probably have an additional revenue source that they did not realize: their home.
Earn Money From Your Home
If you are retired and own your home, a reverse mortgage can be a way to bring in much needed extra income on a monthly basis. Unlike a traditional mortgage, a reverse mortgage pays you. A company will offer to give you a predetermined monthly payment in exchange for the deed to the property once you pass away or move on to a long-term care facility. They will also accept repayment if you decide to sell the home before then.
Live in Your Home, Get Money
You do not pay the company ( Fairway Mortgage in Aurora) for a reverse mortgage. There are no payments because the company is essentially purchasing your house from you in the future, and paying you in advance. You get to live in the home as you normally would and get a monthly payment on top of it. Keep in mind that you will not be granted to the full value of your home in a reverse mortgage; a 50% return of the equity you have in your home is more likely. This because the company is buying your home in order to make a profit and to do so they must by it for less than market value.
Who Can Benefit From A Reverse Mortgage
A reverse mortgage is ideal for those who own a home and have no one to “pass it on to” once they are gone. If you have no heirs, there will be no one left to benefit from your home. You might as well receive a benefit from it while you are alive by receiving reverse mortgage payments.