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reverse annuity mortgage

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reverse annuity mortgage

–noun
a type of home mortgage under which an elderly homeowner is allowed a long-term loan in the form of monthly payments against his or her paid-off equity as collateral, repayable when the home is eventually sold. Abbreviation: RAM
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Based on the Random House Dictionary, © Random House, Inc. 2009.
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Main Entry:  reverse annuity mortgage
Part of Speech:  n
Definition:  See reverse mortgage
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Copyright © 2003-2009 Dictionary.com, LLC
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Financial Dictionary

reverse annuity mortgage

A mortgage in which a homeowner's equity is gradually depleted by a series of payments from the mortgage holder to the homeowner. Thus, a reverse annuity mortgage increases in size as the annuity payments continue. A reverse annuity mortgage is used primarily by elderly homeowners who wish to convert the equity in their homes into a stream of retirement income payments.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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