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TERMINOLOGY
A reverse annuity mortgage is a special type of loan that provides regular monthly payments to homeowners. Many individuals that have reached retirement age seek out this type of loan because of the many benefits that it provides. Here are some of the advantages of a reverse annuity mortgage.
Regular Income
One of the biggest advantages of this type of program is that you can convert the equity in your home into a regular source of income. The lender is going to be making regular payments to you in order to purchase the equity in your home. For many seniors, this can provide a way to supplement a small pension check or Social Security payment.
No Payments Required
Another big advantage of this type of program is that you will not have to make any payments to the lender at any point. Even after you have finished receiving your monthly payments, you will not be required to start making any payments back to the lender. They will not be paid until you sell the house or until you pass away and your beneficiaries pay them with a life insurance settlement. This provides you with the opportunity to tap into your equity without affecting your living arrangements in the future.
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