Eli5: What is a reverse mortgage?
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A regular mortgage is buying a house in slow motion: you pay the bank every month for a long time, and then you’ll eventually own the house at the end.
A reverse mortgage is *selling* a house in slow motion: the bank pays you every month for a long time, and then the bank eventually owns the house at the end.
First off I’d like to point out a reverse mortgage is basically a scam.
The gist of it is they buy your home now, and they draw up a contract for you to live in it.
Usually the offer they make is way under market, and the contract for you to live in the house is very one sided to the point where many people are cheated out of their homes.
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