What is a reverse mortgage?

A reverse mortgage is a type of home loan available to homeowners in Virginia who are 62 years or older. It allows homeowners to convert a portion of home equity into cash payments. Since the loan does not require monthly payments, the homeowner does not have to worry about making monthly payments. Instead, the loan balance is repaid when the homeowner permanently moves out of the home, sells it, or passes away. The Federal Housing Administration (FHA) insures reverse mortgages, which means that the bank or lender is assured of being repaid in full if the homeowner cannot repay the loan. The loan can be used for any purpose that the homeowner wants, including home improvements, bills, medical expenses, or even travel. When considering a reverse mortgage, homeowners should know that with this type of loan, fees and interest can add up quickly, so they should shop around for the best interest rate and compare the fees charged by different lenders. They should also be aware that the loan must be repaid if they move out of their home or pass away. Additionally, it’s important to note that a reverse mortgage is usually only available to homeowners who have 50% or more equity in their homes. This means that homeowners with little to no equity might not be eligible for this type of loan.

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