Reverse mortgages (sometimes referred to as "home equity conversion loans") give older homeowners the ability to use their built-up equity without the necessity of selling their home. The lender pays out funds determined by your home equity amount; you receive a lump sum, a monthly payment or a line of credit. Paying back your loan isn't necessary until when the borrower puts his home up for sale, moves (such as to a care facility) or dies. At the time your home has been sold or is no longer used as your main residence, you (or your estate) are required to pay back the lender for the money you obtained from the reverse mortgage in addition to interest among other fees.
Most reverse mortgages require youto be at least 62 years of age, have a low or zero balance in a mortgage and use the home as your principal residence.
Homeowners who are on a limited income and need additional money find reverse mortgages advantageous for their circumstance. Interest rates may be fixed or adjustable and the money is nontaxable and doesn't adversely affect Social Security or Medicare benefits. The home can never be in danger of being taken away by the lender or put up for sale without your consent if you live longer than your loan term - even if the current property value creeps under the loan balance. If you would like to learn more about reverse mortgages, feel free to call us at 703.255-5810.
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