Reverse mortgages (sometimes called "home equity conversion loans") give older homeowners the ability to use their built-up home equity without selling their home. The lending institution pays out money determined by the equity you've built-up in your home; you receive a one-time amount, a payment each month or a line of credit. The loan doesn't have to be paid back until the borrower sells his residence, moves out, or dies. When your house has been sold or is no longer used as your main residence, you (or your estate) are obligated to pay back the lender for the cash you obtained from the reverse mortgage in addition to interest among other fees.
The requirements of a reverse mortgage usually are being 62 or older, maintaining the house as your main living place, and holding a small balance on your mortgage or owning your home outright.
Reverse mortgages are ideal for retired homeowners or those who are no longer bringing home a paycheck and need to supplement their limited income. Social Security and Medicare benefits aren't affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed rates. Your lender will not take the property away if you outlive your loan nor may you be forced to sell your residence to repay the loan amount even when the balance grows to exceed property value. If you'd like to find out more about reverse mortgages, please call us at 703.255-5810.
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