With a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. The lender gives you funds based on your home equity amount; you get a lump sum, a payment each month or a line of credit. Paying back your loan isn't required until the borrower sells the home, moves (such as to a retirement community) or dies. You or representative of your estate must repay the reverse mortgage loan, interest accrued, and other finance charges after your property is sold, or you can no longer call it your primary residence.
The requirements of a reverse mortgage loan typically are being 62 or older, maintaining your property as your primary residence, and holding a low balance on your mortgage or owning your home outright.
Homeowners who live on a limited income and need additional money find reverse mortgages helpful for their situation. Interest rates can be fixed or adjustable and the funds are nontaxable and don't adversely affect Medicare or Social Security benefits. Your residence is never at risk of being taken away by the lending institution or put up for sale without your consent if you outlive the loan term - even if the current property value creeps below the balance of the loan. Call us at 866-840-8745 x2 if you would like to explore the advantages of reverse mortgages.
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