With a reverse mortgage (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lending institution pays out money based on your home equity amount; you receive a lump sum, a payment every month or a line of credit. The borrowed money doesn't have to be paid back until the homeowner sells his home, moves away, or dies. At the time your house has been sold or you no longer use it as your primary residence, you (or your estate) must pay back the lender for the cash you got from your reverse mortgage as well as interest among other fees.
Generally, reverse mortgages require youto be at least sixty-two years old, have a small or zero balance in a mortgage and use the property as your principal living place.
Many homeowners who live on a fixed income and need additional funds find reverse mortgages ideal for their situation. Social Security and Medicare benefits aren't affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed interest rates. Your house is never at risk of being taken away by the lending institution or sold against your will if you outlive your loan term - even if the property value goes under the balance of the loan. If you'd like to learn more about reverse mortgages, feel free to contact us at 703.255-5810.
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