A reverse mortgage means just that, it is the reverse of an ordinary mortgage in which you borrow money to purchase a home and make monthly payments. With a traditional forward mortgage, over time your debt decreases and your home equity increases.

A reverse mortgage is a loan against your home that you don’t have to pay back for as long as you live there. You can turn the value of your home into cash without having to make monthly payments. This money can be taken as a lump sum, monthly cash payments to you or in a creditline account where you decide how much cash is available to you.

To qualify for a reverse mortgage, you must be 62 or older and own your home. With a reverse mortgage you don’t have to pay anything back until you die, permanently move out of your home or sell it. Unlike forward mortgages, where your income must be sufficient to qualify, you need not have any income to qualify for a reverse mortgage because there are no required monthly payments.

As you take loan payments you will be “spending down” the equity in your house. When the loan is over, your heirs must repay the loan plus the interest. During the term of the loan you are still responsible to pay the taxes and insurance on your home.

Before making any decisions regarding a reverse mortgage, there are several factors to consider. We will cover these in future posts.

Quiz time : Any idea what the retirement age is in the U.S?

A) 55
B) 59 ½
C) 65
D) 67

Since you knew it was a trick, and I can’t type upside-down, this isn’t much fun. Anyway, the answer is none of the above. You can retire whenever you feel like it. The question is: can you afford to? If you want to retire today, go for it. Best of luck to you…

The numbers above look familiar, right? Where do they come from?

• Age 55 is sometimes the “retirement age” for 401k plans, where you can take money out of the Plan without tax penalties.
• Age 59.5 is the age at which you can start to take money from IRA’s and other accounts without penalty or restriction. There are ways, but it’s tricky.
• Age 65 is when some folks get full Social Security benefits
• Age 67 is when anybody born after 1960 gets full social security benefits

Based on where you will get your income from in retirement, these numbers might help you figure out what your retirement age is.