Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to use their home equity without having to sell their home. The lending institution pays you funds determined by the equity you've accrued in your home; you get a one-time amount, a payment each month or a line of credit. Repayment is not necessary until after the borrower sells the property, moves (such as to a care facility) or dies. You or an estate representative must repay the reverse mortgage amount, interest accrued, and other finance fees when your property is sold, or you are no longer living in it.
The conditions of a reverse mortgage loan often include being sixty-two or older, maintaining your home as your main living place, and having a low balance on your mortgage or owning your home outright.
Reverse mortgages are appropriate for retired homeowners or those who are no longer working and must supplement their income. Interest rates may be fixed or adjustable while the money is nontaxable and doesn't affect Medicare or Social Security benefits. The lender can't take away your residence if you live past the loan term nor will 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'd like to learn more about reverse mortgages, feel free to contact us at 866-300-1550.
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