Loanfactz Definitions

Reverse Mortgage

A Reverse * Mortgage allows older homeowners to convert part of the * equity in their homes into cash without having to sell their homes or take on additional monthly bills. In a regular mortgage, you make monthly payments to the lender, but in a reverse mortgage, you receive money from the lender and generally don't have to pay it back for as long as you live in your home. Instead, the loan must be repaid when you die, sell your home, or no longer live there as your principal residence. Reverse mortgages can help homeowners who are house rich but cash poor stay in their homes and still meet their financial obligations. Be aware that a reverse mortgage can use up all or some of the equity in your home, leaving fewer assets for you and your * heirs. More about Reverse Mortgage

Glossary For This Page
(In Alphabetical Order)

* Default
Failure to perform a legal obligation. A default includes failure to make the payments on a financial obligation, but may also be a failure to perform some action or service that is non monetary (not relating to money).

* Equity
Equity is the difference between the market value of your property and home, and the claims held against it. If you owe $100,000 on your house but it is worth $130,000, you have $30,000 of equity.

* Heir
A person, entitled under law, to inherit (receive) the estate of another.

* Lien
A claim or charge on property for payment of some debt. With respect to a mortgage, it is the right of the lender to take the title to your property if you do not make the payments due on the mortgage.

* Mortgage
A mortgage is a legal document you sign to show that you have granted the lender a * lien on your property as security for repayment of a loan, giving the lender the right to take your property if you * default on the terms of the loan. Some states call it a deed of trust instead of a mortgage.

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