This is Financial Adviser Patrick Munro talking
about what is a reverse mortgage. A reverse mortgage is a very creative financial tool
that is now available to senior Americans age 62 years of age or older. In fact you
can now tell your house “It’s payback time”. Essentially what happens is based on the value
of your house, and guidelines that the federal government has established, you can receive
a line of credit based on the value of the house, which is essentially given to you.
Many times people will use this to retire their current mortgage and receive the home
equity as well, but there are no mortgage payments required at the time of funding.
That’s unique because the interest accrues on the back end of the mortgage, so therefore
you are able to age in place inside the home without having a mortgage payment. And it
gives senior Americans a great opportunity to enhance the value of their life and get
more cash flow out of an asset they’ve worked very hard to achieve. It’s not available or
suitable for everyone, and children, of course, are able to refinance the house after the
parents have passed on, they have up to a year to do so. So there’s some very valuable
information there on reverse mortgages. This is Financial Adviser Patrick Munro.