Modern reverse mortgages are a type of loan that allows most homeowners who are at least 55 years old to borrow against their home equity. Unlike a regular forward mortgage, monthly loan payments are completely optional.
Simply put, you have the flexibility to treat your reverse mortgage just like a traditional forward-mortgage, making monthly principal and interest payments. However, borrowers have the option of skipping payments… or making no monthly payments at all.
The term “reverse mortgage” is well-established and widely recognized, but the flexible structures and options of modern reverse mortgage loans have evolved dramatically over the past decades. This has made the term “Reverse Mortgage” a bit antiquated.
Another reason why the name “Flex” makes sense is because you have unmatched flexibility in how to receive your payments: Either as a lump sum, as a line of credit, as monthly payments or any combination thereof.
Changing the name could cause confusion among consumers and industry professionals alike. That being said, the flexibility that modern reverse mortgages offer is certainly one of their key benefits.
These “Flex” reverse mortgages are a rapidly growing segment throughout the U.S. If you are interested in learning more, we recommend you speak with a trusted advisor to weigh the pros and cons of this type of loan before deciding if it’s right for you.