A reverse mortgage essentially allows a senior home owner to convert the equity they have in their home into cash. There are virtually no requirements regarding health or income status and you must be at least 62 years of age to qualify in addition to living in your home. It is important to remember that a reverse mortgage may not work for everyone and there are some unique features associated with reverse mortgages that prospective borrowers should be aware of.

A reverse mortgage is paid out in several ways. One option is a lump sum. With a lump sum you would receive the amount of money you are eligible for upfront. You can also arrange to have a monthly payment account or credit line from which you can draw up to the value of your loan. Many senior homeowners that choose this type of home mortgage do so for the financial stability and peace of mind that it provides. A reverse mortgage gives you the option of having cash available when you need it which is especially helpful for sudden expensive costs that can arise such as like health care, estate planning, etc.

A reverse mortgage probably isn’t the best option if you intend to sell your home within the next few years. This is due to the high upfront fees and charges that borrowers usually incur with reverse mortgages. If you are thinking of taking out a reverse mortgage, be sure to get professional and legal advice before you make your decision as this particular type of mortgage isn’t exactly right for everyone.

If you intend to leave your home to your children or other family members, a reverse mortgage generally isn’t the best option. After your death, your home will have to be sold to a third party in order to repay the amount of the loan. If you wish to leave your home to your family as an inheritance, other options such as a conventional home equity loan or a no-interest loan might be a better alternative.

Some people remortgage because they have to. They may have reached the end of their mortgage deal, or they may need to free up some equity in their property.

Other people, however, choose to remortgage because they’ve spotted a deal that’s simply better than the one they’re on right now and they’ve decided they want to cut their monthly payments by moving to it.

The interest charged on mortgages can vary more than you might think, due to changes in the base rate set by the Bank of England, levels of confidence within the banking system, worries about the economy and so on. Someone paying 7% interest on their mortgage could realise they have the option of switching to a 6% mortgage – or 5% – or 4%!

But is it actually worth it? The answer may not be as straightforward as you might think. Many mortgages can come with an ‘early redemption charge’ – a fee that the lender will charge the borrower if they leave the mortgage earlier than originally agreed. Some people may think this sounds unfair, but there’s a good reason for it: if they leave the mortgage early, they obviously won’t be paying as much through their monthly payments as the mortgage lender originally expected.