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Homeowners who have paid their original mortgage loans in full are taking advantage of their home equity by drawing it out through a reverse mortgage. A reverse mortgage is much like a typical mortgage. A lending institution will provide the funding based on the value of the home, however, lenders in reverse mortgages will be more interested in repayment than many typical mortgage lenders.
The beauty of the reverse mortgage is the ability to do it for little to no cost. There are costs involved with any large financial transaction. Land and homes are subject to more than most. However, with a reverse mortgage you are drawing equity from your home. This money can be put right in your pocket or bank account, and some can be pre-designated to pay for the closing and other costs of the loan. Be sure that if you are looking into a reverse mortgage, you ask that your closing costs be paid out of the loan proceeds. For people who are ‘house-rich' but a little strapped for cash, a reverse mortgage is a low cost, long term solution.