For Diabetic Grandson

That’s not quite the way it works, and you’re forgetting about interest that would accumulate on your borrowing.But  to answer your question, if you choose to receive the money monthly, it will continue as long as you remain in your home even if the equity is used up.  When you move out or die, the debt must be repaid, often by the sale of the property.Your estate would never have to pay more than the house was worth.If on the other hand, there is money left after the sale, it goes to your heirs.

You would remain the owner of your property, and as with any mortgage, the loan is not considered taxable income.You don’t have to make any repayments as long as you live in the house, whether you borrow a lump sum or receive monthly checks.You do start out owing substantial closing costs.

I went to the AARP’s web site to calculate how much you could qualify for, based on your life expectancy and the value of your condo.With HUD’s Home Equity Conversion program, it looks as if you could borrow a lump sum of more than $95,000 or receive monthly payments of around $730, with interest accumulating at today’s rate of 6.56 percent.With the HomeKeeper program offered by Fannie Mae,  you’d qualify for a lump sum of up to $66,000, or a monthly draw of $611, interest-free.

Drawbacks:  In the end, you’d have less to leave your heirs, because the condo would have that debt against it.And if you were going to be there only a few years, repaying those closing costs would mean it had been an expensive way to raise money.
 
Otherwise, though, a reverse mortgage can be an excellent tool for seniors who need to tap the equity in their homes and don’t want to sell.