Reverse mortgages (sometimes referred to as "home equity conversion loans") give older homeowners the ability to tap into equity without having to sell their home. Deciding how you would prefer to be paid: by a monthly payment amount, a line of credit, or a one-time payment, you may receive a loan amount determined by your home equity. Repayment is not required until the homeowner puts his home up for sale, moves (such as into a retirement community) or passes away. When your house has been sold or is no longer used as your primary residence, you (or your estate) have to repay the lender for the money you obtained from the reverse mortgage plus interest and other fees.
The conditions of a reverse mortgage loan usually include being 62 or older, maintaining the house as your primary residence, and holding a low remaining mortgage balance or owning your home outright.
Many homeowners who live on a limited income and need additional money find reverse mortgages helpful for their situation. Interest rates can be fixed or adjustable while the funds are nontaxable and do not adversely affect Medicare or Social Security benefits. Your lending institution cannot take the property away if you outlive your loan nor may you be forced to sell your residence to repay the loan 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 (888) 299-4585.