Reverse mortgage

Dear Mr Tan,

A few years ago, I took a reverse mortgage from NTUC Income and draw out $1,200 a month. The value of my property has appreciated since. Who keeps the gain on the property? Is it NTUC Income?

REPLY:

Under a reverse mortgage, you are still the owner of the property. The reverse mortgage is a loan that accumulates interest.

If you decide to sell the property (which is not at a much higher value), you keep the entire amount of the property (after repaying the loan and accumulated interest on the reverse mortgage). All the property gains goes to you, as the owner.

It is a good scheme!