In a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. The lending institution pays out money determined by the equity you've accrued in your home; you receive a one-time amount, a monthly payment or a line of credit. The borrowed money does not have to be paid back until the homeowner sells his residence, moves away, or passes away. When you sell your property or is no longer used as your primary residence, you (or your estate) have to pay back the lending institution for the cash you got from the reverse mortgage in addition to interest and other finance charges.
The requirements of a reverse mortgage loan often are being 62 or older, maintaining the home as your main residence, and holding a small balance on your mortgage or owning your home outright.
Homeowners who live on a fixed income and have a need for additional money find reverse mortgages helpful for their circumstance. Interest rates can be fixed or adjustable and the funds are nontaxable and do not affect Medicare or Social Security benefits. Your residence will never be in danger of being taken away from you by the lender or sold without your consent if you outlive your loan term - even if the current property value creeps below the balance of the loan. If you would like to find out more about reverse mortgages, feel free to contact us at 866-300-1550.
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