Eli5: What is a reverse mortgage?
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Your name is Hank. You are 75 years old. Your only child died in a horrible blender accident. You’re estranged from all your other family and have no one you would want to give your belongings too.
You get a social security check every month and some of your pension. And it covers all your bills. Nothing more. Just the bills. You’re doing ok, it’s not a glorious life but you’re living well.
A nice man from the bank offers to buy your house. You tell him you’re not interested in moving. Here’s the best part! You don’t have to. They decide to pay you 5000$ a month, and in exchange, when you die (remember you’re 75) they get the house! They own it! But until then it’s still your house. Now you have social security and your pension and a 5000$ check from the bank. A check you will recieve every day until you die. Garuantee d. Now you can live life VERY comfortably, maybe go on a cruise or buy a fancy car.
That’s a reverse mortgage. You sign the house over to the bank. In exchange the previous home owner gets a hefty monthly check, and to live in the home until they die. If you have no heirs it’s a phenomenal deal.
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