Reserve-annuity mortgages

A mortgage-financing device which may be of help to older families and retired individuals is the Reverse-Annuity Mortgages (RAM). This financial instrument is designed to provide additional income to those who have already paid off their home mortgage but intend to keep their present home. The lender determines the current value of the home and pays the borrower a fixed monthly annuity, amounting to a specified percentage of the property‘s value. The loan is secured by a gradually increasing mortgage on the borrower‘s home. Repayment of the loan occurs either when the annuity holder dies, with loan being discharged against the deceased‘s estate, or when the home sold.