With a reverse mortgage loan (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. The lender pays you funds based on the equity you've built-up in your home; you get a lump sum, a monthly payment or a line of credit. The borrowed money doesn't have to be repaid until the homeowner sells his home, moves away, or dies. After you sell your home or you no longer use it as your main residence, you (or your estate) have to pay back the lending institution for the cash you received from the reverse mortgage in addition to interest among other fees.
Generally, reverse mortgages are offered to homeowners at least sixty-two years of age, have a small or zero balance owed against your home and maintain the home as your principal residence.
Many homeowners who live on a limited income and find themselves needing additional funds find reverse mortgages advantageous for their situation. Social Security and Medicare benefits can not be affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. The lending institution will not take away your property if you live past the loan term nor can you be required to sell your residence to pay off your loan even when the balance is determined to exceed current property value. If you would like to learn more about reverse mortgages, feel free to contact us at 866-300-1550.
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