Reverse mortgages (sometimes called "home equity conversion loans") enable older homeowners to tap into built-up home equity without selling their home. The lending institution pays out money determined by your home equity amount; you receive a one-time amount, a monthly payment or a line of credit. Repayment isn't necessary until the time the borrower puts his home up for sale, moves (such as into a care facility) or passes away. After your home has been sold or you no longer use it as your main residence, you (or your estate) have to pay back the lending institution for the money you obtained from the reverse mortgage as well as interest and other finance charges.
The requirements of a reverse mortgage normally include being sixty-two or older, using the home as your main living place, and having a small balance on your mortgage or owning your home outright.
Many homeowners who are on a limited income and find themselves needing additional money find reverse mortgages helpful for their situation. Interest rates can be fixed or adjustable and the money is nontaxable and does not adversely affect Medicare or Social Security benefits. The lending institution is not able to take away your home if you outlive your loan nor can you be obligated to sell your residence to pay off your loan amount even when the loan balance grows to exceed property value. Call us at 703.255-5810 if you would like to explore the benefits of reverse mortgages.
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