In a reverse mortgage (sometimes 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 lending institution pays out funds based on the equity you've built-up in your home; you receive a one-time amount, a payment every month or a line of credit. The loan doesn't have to be paid back until the homeowner sells his residence, moves out, or passes away. You or an estate representative must pay back the reverse mortgage loan, interest accrued, and finance fees after your house is sold, or you can no longer call it your primary residence.
The conditions of a reverse mortgage loan normally are being 62 or older, using the house as your main living place, and holding a small remaining mortgage balance or having paid it off.
Many homeowners who are on a fixed income and find themselves needing additional money find reverse mortgages helpful for their circumstance. Social Security and Medicare benefits aren't affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. Your lender will not take away your property if you outlive your loan nor may you be obligated to sell your home to repay the loan amount even when the balance grows 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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