If you've been watching the local TV stations or have been driving down I-15 in Utah County recently, you may have seen ads with local TV personality Dick Norse endorsing a reverse mortgage company. The ads suggest that Dick Norse would trust this company with his family's future, blah, blah, blah. And maybe that's true. I know nothing about this particular company endorsed by Mr. Norse, but I can give you some information on reverse mortgages that can help you cut through some of the myths that surround this industry.
A reverse mortgage is exactly what it sounds like. Instead of you paying money to the bank over time so that you can live in your home while you build up equity in it, a reverse mortgage allows you to continue to live in your home while the bank pays you. What the bank gets in return, is a mortgage on the equity in your home. So when you and your spouse move out of the home (to go to a nursing home for example) or when you both pass away, the proceeds of the sale of your home will be used to pay back the bank for the money they advanced to you while you were living in your home. Generally, if there is any equity left after paying back the loan, it will go to your heirs.
That's the basic concept. However, the bigger question is this: Is a reverse mortgage right for you?