In a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without selling their homes. Deciding how you would prefer to to receive your money: by a monthly payment, a line of credit, or a lump sum, you may get a loan based on your home equity. Repayment is not necessary until when the borrower puts his home up for sale, moves (such as to a care facility) or dies. You or your estate representative must repay the reverse mortgage amount, interest accrued, and other finance charges when your property is sold, or you can no longer call it your primary residence.
Most reverse mortgages require you be at least 62 years of age, have a low or zero balance owed against your home and use the property as your principal residence.
Reverse mortgages can be appropriate for homeowners who are retired or no longer bringing home a paycheck and need to supplement their income. Interest rates can be fixed or adjustable while the money is nontaxable and does not affect Social Security or Medicare benefits. The residence is never in danger of being taken away by the lender or sold against your will if you live longer than the loan term - even if the current property value dips under the loan balance. If you would like to find out more about reverse mortgages, feel free to contact us at 866-300-1550.
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