Reverse mortgages enable elderly homeowners to trade the equity in their houses for monthly or lump sum payments, or a line of credit. Most reverse mortgage loan programs are offered by the U.S. Department of Housing and Urban Development, also known as “HUD.”
Unlike traditional loans, the borrower does not make monthly payments to the lender. Instead, the lender makes monthly payments to the borrower until the homeowner dies, sells the house or is unable to live in the home for a period exceeding 12 consecutive months. At that time, the debt must be repaid, including interest. No matter what the loan balance, the estate is not responsible for more than the value of the property. Keep in mind, a reverse mortgage may be used in combination with private pay or long-term care insurance, which is described below, to cover the cost of care. As with any loan, be sure you understand the financial responsibilities of a reverse mortgage.
Learn more. Please visit the HUD website to find out about reverse mortgages. Or contact the Connecticut Housing Finance Authority at 1-860-571-3502.