What is a Reverse Mortgage?

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This is a special type of home loan under which the owner of the house takes a loan with the home as the collateral, but does not pay any amount back to the lender. Instead, the home goes into the possession of the lender after the death of the owner. Here the loan amount, the rate of interest, the duration of the loan, the likely appreciation of the value of the house, etc. are calculated in such a way that the loan amount will remain less than the value of the house over the tenure of the loan.

 

 

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