Eli5: What is a reverse mortgage?
In: 308
They’re for old people who can’t afford their monthly expenses. Instead of dying and leaving a home to their heir(s), they slowly sell it to the bank and use that money now.
Upside is that someone can maintain their standard of living even after spending all of their savings.
Downside is that their children will have a much smaller inherence since they were selling off their biggest asset and spending it before death.
If someone is considering a R-Mortgage, you may consider moving in together instead to save money and preserve their wealth.
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