How does a reverse mortgage work?

Posted on | October 26, 2009 | No Comments

A reverse mortgage is very similar to the uk equity release market in that it is a financial tool designed to help retirees fund their retirement. In these times of recessions and pension funds have all but vanished, interest rates are at all time lows – meaning savings do not increase in value in line with inflation. So evolves a new tool called the reverse mortgage – thus allowing the retiree to release some of the equity that is tied up in their home. It is similar in a sense to a remortgage with the sole exception that you don’t make any repayments until the house is sold or you move into permanent care.