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Finance: What is a Reverse Mortgage? 6 Views
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Description:
With a reverse mortgage, payments go in the opposite direction of a normal mortgage, where you pledge your home as an asset, and receive $ each month.
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Transcript
- 00:00
Finance allah shmoop What is a reverse mortgage All right
- 00:07
people let's start with a normal mortgage You put one
- 00:09
hundred grand down borrow three hundred grand and are the
- 00:12
proud new owner of this baby in palo alto california
- 00:15
You make payments for thirty years at five percent interest
Full Transcript
- 00:18
and then you retire their debt free So that's a
- 00:21
mortgage but what's a reverse mortgage Like one of these
- 00:25
egg trump Well kind of at least financially the payments
- 00:29
go in the opposite direction of a normal mortgage Like
- 00:32
you're old you just want to live out your remaining
- 00:35
years with the basic comforts Shower seats stair lift high
- 00:39
absorption adult diapers You own all of your home No
- 00:43
mortgage on it You paid it all off The home
- 00:45
is now worth a million box Nice shoebox There you
- 00:49
can do a reverse mortgage pledging your home is an
- 00:53
asset and basically just receiving a payment of l say
- 00:56
five grand a month from that reverse mortgage and you'll
- 01:00
get to deduct interest costs as you go Justus if
- 01:03
it were a normal mortgage well after forty months you
- 01:07
you know croak in that time period you've taken out
- 01:09
Forty times five grand or two hundred grand in loans
- 01:12
plus some interest and you sell your home for a
- 01:15
cool million Rather your heirs dio So what happens now
- 01:19
Well they just take the million bucks from the sale
- 01:21
write a check for two hundred grand and change to
- 01:24
the bank to pay off the reverse mortgage that you
- 01:27
had accrued while you were you know wasting away to
- 01:29
nothing and your heirs end up happy like they miss
- 01:33
you But you know a free stair lift Who are 00:01:37.997 --> [endTime] you
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