Grand Rockies

For the most part, it’s true, particularly if you consider how they came about. In the United States, reverse mortgages have been around for some 20 years and they were created when the American Associated of Retired Persons lobbied the US Congress to come up with a financial product that would allow seniors to stay in their homes as long as possible. It took awhile for the product to catch the attention of the public. According to Cathy Jett who wrote an article for a Virginia newspaper, reverse mortgages have been gaining popularity only in the last three years.

At its most basic level, a reserve mortgage is a loan that a homeowner takes out on his house. American laws dictate that the homeowner must be 62 years and older, own his house and live there for majority of the time. When they apply for a reverse mortgage, the amount they receive will depend on their age, the interest rates in effect at the time of their application and the value of their house. The applicant has the choice of receiving the loan in one lump sum, in monthly instalments, in the form of a line of credit or as a combination of the first three options.