In a reverse mortgage loan (also called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. The lender pays out funds determined by the equity you've accrued in your home; you get a one-time amount, a monthly payment or a line of credit. Repayment is not necessary until after the homeowner sells the home, moves (such as to a care facility) or dies. You or representative of your estate is obligated to repay the reverse mortgage amount, interest accrued, and other finance charges after your home is sold, or you can no longer call it your primary residence.
The conditions of a reverse mortgage loan often 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.
Reverse mortgages can be helpful for homeowners who are retired or no longer working but have a need to add to their income. Rates of interest may be fixed or adjustable and the funds are nontaxable and do not adversely affect Medicare or Social Security benefits. Your lender is not able to take away your property if you live past the loan term nor can you be forced to sell your residence to repay your loan amount even when the loan balance grows to exceed current property value. If you would like to learn more about reverse mortgages, please call us at 7032555810.
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