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Finance allah shmoop What is a reverse mortgage All right

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people let's start with a normal mortgage You put one

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hundred grand down borrow three hundred grand and are the

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proud new owner of this baby in palo alto california

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You make payments for thirty years at five percent interest

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and then you retire their debt free So that's a

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mortgage but what's a reverse mortgage Like one of these

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egg trump Well kind of at least financially the payments

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go in the opposite direction of a normal mortgage Like

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you're old you just want to live out your remaining

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years with the basic comforts Shower seats stair lift high

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absorption adult diapers You own all of your home No

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mortgage on it You paid it all off The home

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is now worth a million box Nice shoebox There you

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can do a reverse mortgage pledging your home is an

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asset and basically just receiving a payment of l say

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five grand a month from that reverse mortgage and you'll

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get to deduct interest costs as you go Justus if

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it were a normal mortgage well after forty months you

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you know croak in that time period you've taken out

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Forty times five grand or two hundred grand in loans

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plus some interest and you sell your home for a

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cool million Rather your heirs dio So what happens now

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Well they just take the million bucks from the sale

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write a check for two hundred grand and change to

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the bank to pay off the reverse mortgage that you

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had accrued while you were you know wasting away to

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nothing and your heirs end up happy like they miss

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you But you know a free stair lift Who are 00:01:37.997 --> [endTime] you

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