Instead, the loan balance is paid off when you sell the property, refinance the reverse mortgage or pay-off the loan balance with other funds. Unlike a regular mortgage, with a reverse mortgage you do not pay down the loan over time (because you do not make any monthly mortgage payments).
Review Our Mortgage Expert Insights on Top Reasons to Get a Reverse Mortgage. By adding interest expense to the mortgage balance every month instead of paying it, you increase the principal mortgage balance, so you pay interest on interest which is one of the biggest drawbacks of a reverse mortgage. Instead of making monthly payments comprised of both principal and interest, the interest expense with a reverse mortgage is added to the mortgage balance. This compares to a regular mortgage where the mortgage balance typically decreases over time as the borrower makes his or her monthly mortgage payments. The biggest difference between a regular mortgage and a reverse mortgage is that the borrower does not make monthly payments with a reverse mortgage so the mortgage balance increases over time. The disbursements you receive from a reverse mortgage are tax-free. With some types of reverse mortgages you can take equal monthly disbursements or draw down a line of credit. Like a regular mortgage, when you take out a reverse mortgage you get a sum of money from the bank. For example, if you own a property that is valued at $300,000 and you have a mortgage against the property with a $50,000 principal balance, you have $250,000 in equity in your property ($300,000 (property value) - $50,000 (mortgage balance) = $250,000 in property equity. The equity in your property is the value of your property minus the amount of any mortgages you have on the property. Similar to a regular, forward mortgage, a reverse mortgage allows you to borrow money using the equity in your home. Jensenĭouglas E.The official term for a reverse mortgage is Home Equity Conversion Mortgage (HECM) but most lenders and borrowers use the term reverse mortgage. Call: (720) 336-7250Ĭlick here to read more about Douglas E. 
He holds the following licenses LMB# 100026825 NMLS# 368568.
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Jensen is a professional mortgage consultant for FHA, VA, Conventional, Reverse, Jumbo Reverse, Non-QM, Commercial Mortgages and Hard Money Loans.
We would highly recommend him to get to the closing table!!." - Audrey, Boulder, Colorado " I would like to thank Doug Jensen for his help with our refinance of our home he was awesome, he was professional, and looked out for our best interest he was personal and became someone we call a friend, he answered every question we had and we had a lot and if he wasn't sure he found the answer, he made our refinance a breeze! We highly recommend him." - Bill & Valerie O'Loughlin Douglas E. He was the one who never gave up on and was always ready to help, especially those times when I was feeling overwhelmed. Thanks again and we will be using him for more of our home loans in the future." - Rayteri, Fort Collins, Colorado "Doug made our deal happen! We will definitely use him again. He was the best, worked hard and got them done without any problems. "We have used Douglas on 5 different home loans I could not recommend anyone else. "Thanks to the reverse mortgage I did with Douglas, I could keep on living in my own house, without having any more money worries." - Jane, Denver, Colorado
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