Question

Maury and Bev have saved all their lives and they have been able to pay off their mortgage on their home. Bev is getting elderly and frail and Maury needs to put her into a nursing home where they can give her round-the-clock care. Maury intends to finance this arrangement by getting a loan where the lender makes payments to the homeowner each month, based on accumulated equity. What type of loan does Maury want to get?

Answer 1

Answer:

Reverse Mortgage Loan

Explanation:

Banks allow older people above the age of 62 to use their home's value to obtain a reverse mortgage loan.  The bank values the home and extends credit facilities to its elderly owners. The loan amount is usually a part of the home's value and is paid as a lump sum or fixed monthly payments.

Maury wants to apply for a reverse mortgage loan. He will use the value of their home to obtain a credit facility to care for Bev. Maury does not need to repay the loan. The bank will recover its money by selling the house once the couple dies or relocates.