Reverse mortgage valuation could transform retirement income forever

The Mechanics of Reverse Mortgages

Reverse mortgages can be a lifeline for retirees who are asset-rich but cash-poor. The most common type is the Home Equity Conversion Mortgage (HECM), insured by the Federal Housing Administration (FHA). The valuation of the mortgage is influenced by the appraised value of the home, the age of the borrower, and the interest rate at the time of the loan. Typically, the older you are, the more equity you can access. This product allows you to receive funds in several ways: as a lump sum, monthly payments, or a line of credit.