Reverse mortgage
A reverse mortgage or a lifetime mortgage is a financial deal between a homeowner and a lender, in which the lender releases the home equity of his/her property to the homeowner for an agreed way of payment. Payments could be made with a lump-sum payment or a series of multiple payments. This kind of mortgage is usually available for seniors between 50 to 65 (62 or over in the United States), who does not wish to leave a valuable property for the inheritors and decide to take a reverse mortgage to finance everyday costs instead.
In case of taking an option of monthly payments the owner of the property has to pay the monthly fees until the lender dies, moves into an aged care institution or the property is sold. If the payment period is over the homeowner receives the full ownership, if the value of it shows a considerable increase after the reverse mortage deal has been made there is an option to make a second-mortgage deal to offset the differences in value. The size of payments is primarily determined by the actual value of the property, the age of the lender (the more older he or she is the more money will be paid) and the rate of interest set.