Reverse mortgages (also called "home equity conversion loans") give older homeowners the ability to use their home equity without the necessity of selling their home. The lending institution pays out funds determined by your home equity amount; you get a one-time amount, a payment each month or a line of credit. The loan does not have to be paid back until the borrower sells the home, moves out, or dies. When you sell your home or is no longer used as your main residence, you (or your estate) are obligated to pay back the lending institution for the money you received from your reverse mortgage as well as interest among other fees.
Generally, reverse mortgages are appropriate for borrowers who are at least 62 years old, have a low or zero balance owed against the home and use the house as your principal residence.
Reverse mortgages can be ideal for retired homeowners or those who are no longer bringing home a paycheck but need to add to their income. Social Security and Medicare benefits aren't affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. Your lending institution is not able to take the property away if you outlive your loan nor may you be required to sell your residence to pay off the loan amount even if the loan balance is determined to exceed property value. Contact us at 561-395-4264 to look into your reverse mortgage options.