Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to tap into home equity without selling their home. The lending institution gives you money based on your home equity amount; you get a lump sum, a monthly payment or a line of credit. Repayment is not required until after the homeowner sells the home, moves (such as into a care facility) or passes away. You or your estate representative has to pay back the reverse mortgage loan, interest , and other finance charges at the time your property is sold, or you no longer live in it.
Generally, reverse mortgages require youto be at least sixty-two years old, have a small or zero balance in a mortgage and use the house as your principal living place.
Homeowners who are on a fixed income and need additional funds find reverse mortgages advantageous for their situation. Rates of interest can be fixed or adjustable while the money is nontaxable and doesn't adversely affect Social Security or Medicare benefits. The lender will not take away your home if you live past the loan term nor will you be made to sell your home to repay your loan amount even when the loan balance grows to exceed property value. If you'd like to find out more about reverse mortgages, feel free to call us at 866-300-1550.
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