How reverse mortgages work

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Mortgages: Home Loans on the Web

Buying a first home is an important milestone in anyone's life. But even if it's your fifth home purchase, the financial jargon and seemingly endless paperwork involved in getting a mortgage can overshadow the excitement of owning your new home. On the Web you'll be able to find resources that help you understand what a mortgage is and how it works; decide which type of mortgage works best for you; find a reputable lender; and even understand what happens after you get your loan. For a Spanish-language version of the Guide, click here.

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How does a mortgage work?

It would be nice if getting a mortgage were as simple as asking for one and then getting a check in ... read more »

Choosing the right type of mortgage

Choosing the right type of mortgage can be as important as choosing the right home. Instead of ... read more »

Applying for a home loan

Once you have found your dream home you want to be able to move in as quickly as possible; ... read more »

After mortgage approval: switching lenders, foreclosure, and tax breaks

Once you cross all those t's and dot the i's on your mortgage paperwork, you can finally enjoy your ... read more »

Home equity debt

You can't always plan for your future financial needs. One way to readily access credit is to use ... read more »

How reverse mortgages work

Reverse mortgages are almost like taking an advance on the sale of your house; when you take out a regular mortgage you gain equity and lose debt as you pay it off, but a reverse mortgage takes away equity as you collect money from it.

Dulcinea's Insight

A reverse mortgage is a way to get cash based on the value of the home that you own; it will decrease the equity that you have earned on your home. Sometimes there are age requirements for getting a reverse mortgage.

Be cautious before entering into a reverse mortgage contract with any lender on the Web. Check the Better Business Bureau Web site for an evaluation (or possible complaints against a company) before you agree to a reverse mortgage with any company.

Dulcinea's Picks

Reverse.org has quick and easy explanations of reverse mortgages and how they work (for example, how much you can borrow and how you pay them back). This site hasn't been updated in 10 years, but we're still showing it because it has a comprehensive FAQ section.

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AARP has a section on reverse mortgages that gives you a basic overview of what they are, how they work, who qualifies for a federally insured reverse mortgage, alternate options to consider before taking a reverse mortgage, how to select a lender, and other helpful articles. AARP also has a reverse mortgage calculator so you can find out how much money you could get through a reverse mortgage.

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The Federal Trade Commission has a cautionary guide for consumers to review before settling on a reverse mortgage. This site also has resources for homeowners who feel that they may have been a victim of reverse mortgage fraud.

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