With a reverse mortgage loan (also called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. The lending institution pays out funds determined by the equity you've accrued in your home; you receive a one-time amount, a payment every month or a line of credit. The borrowed money doesn't have to be paid back until the borrower sells his home, moves away, or dies. You or representative of your estate is required to repay the reverse mortgage loan, interest accrued, and finance charges at the time your house is sold, or you no longer live in it.
Typically, reverse mortgages are appropriate for homeowners at least sixty-two years old, have a low or zero balance in a mortgage and use the house as your principal living place.
Reverse mortgages are advantageous for homeowners who are retired or no longer bringing home a paycheck but need to add to their fixed income. Interest rates may be fixed or adjustable and the funds are nontaxable and do not affect Medicare or Social Security benefits. The lender isn't able to take the property away if you outlive your loan nor will you be made to sell your residence to repay the loan amount even if the balance grows to exceed current property value. If you'd like to learn more about reverse mortgages, please contact us at 866-300-1550.
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