UAE: Reverse mortgages aren’t for everybody: Who is and isn’t it ideal for?

UAE: Reverse mortgages aren’t for everybody: Who is and isn’t it ideal for?

Dubai: A reverse mortgage allows a retired homeowner to tap into the equity of a paid off home. A homeowner who is 62 or older can borrow against the value of their home and receive funds as a lump sum or a fixed monthly payment. Unlike a normal mortgage - the type used to buy a home - a reverse mortgage doesn't require the homeowner to make any loan payments. In the right circumstances, a reverse mortgage can be a source of badly-needed cash in an individual's retirement years. On the other hand, there are some negative aspects to reverse mortgages. A reverse mortgage comes with several downsides, such as upfront and ongoing costs, a variable interest rate, an ever-rising loan balance and a reduction in home equity. The fact that no payments must be made on a reverse mortgage as long as one homeowner remains living in the house is a major feature of reverse mortgages. However, the fine print lists several circumstances when the mortgage lender can foreclose on the home. The homeowner must stay current on property tax (if any) and insurance payments. Initially, if these payments are not made, the lender would set aside some of