For people over the age of 60, one of the latest methods of releasing money from their property is the use of reverse mortgages which can dramatically change the life of someone who no longer has a regular income. Of course you can also find many articles proclaiming how damaging they are and this can confuse the issue plus makes it difficult for a person to choose as they do not know whether it would be a good idea or a bad one. In reality, they can be both good and bad just like many other financial arrangements but their popularity has been a long time coming considering they have been available since 1961.
The sudden stir has been caused by the baby boomer population that is about to start retiring, as of January 1, 2008. The future number of people retiring in the United States and other Western nations is set to increase dramatically and a large percentage of these people only have their home as an available asset.
Many people coming up to 60 years of age have either made little provision for their retirement or have decided that traditional financial methods are not worth the effort so they need an additional source of income. The great benefit of a reverse mortgage is it pays out a monthly income but no repayments are made which means the debt just increases whereas with a traditional repayment mortgage, payments are made to lower the amount owed.
As far as the borrower is concerned they will not have to provide proof of any income and the money they have been receiving will be repaid in full when the loan is ready for repayment. What this means is that people who have been close to bankruptcy or foreclosure have been saved as their credit score and income are not relevant.
