Reverse Mortgages: How They Work

How do reverse mortgages work? A reverse mortgage enables older homeowners who are 62 years of age or older to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you.

You get to stay in the home as long as you live. While you are alive and living in the home, interest accrues. When you pass on, move out, or sell the home, the mortgage balance becomes due. Neither you nor your heirs are responsible for any shortfall if the mortgage balance exceeds the value of the home.

Reverse mortgages are not for everyone. For one thing, they are taken out in the expectation that the mortgage balance will increase. That means you can’t get a loan for the full value of the home. How much you can get will depend on several factors, including your age at the time of the loan. You will not be able to own the property with anyone who is younger than 62, which may complicate estate planning.

If you are considering a reverse mortgage, it's important to understand how the loan works and what your rights and responsibilities are. This is why you should consult a lawyer experienced in the real estate and mortgage field.

Rubin & Licatesi, P.C. is a full service law firm with experience in handling real estate matters such as reverse mortgages. We recognize the individual needs of each client and our attorneys and support staff work together as a team, coordinating resources and striving for the best possible results on behalf of our clients. In addition to providing outstanding legal representation, our attorneys possess the highest academic credentials, maintain strong community ties and demonstrate the strictest personal and professional ethics.

You may have heard about reverse mortgages, but do not really understand how they work or unsure if it is right for you. Let our lawyers at Rubin & Licatesi, P.C. sit down with you to discuss your concerns. Contact us now at (516) 227-2662 or e-mail us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .