Reverse mortgages (sometimes referred to as "home equity conversion loans") give older homeowners the ability to tap into built-up equity without having to sell their home. The lending institution gives you funds based on your home equity amount; you receive a one-time amount, a payment each month or a line of credit. The borrowed money doesn't have to be paid back until the borrower sells the residence, moves out, or dies. After you sell your home or you no longer use it as your primary residence, you (or your estate) have to repay the lender for the funds you got from the reverse mortgage plus interest and other finance charges.
The conditions of a reverse mortgage usually are being sixty-two or older, maintaining the property as your primary living place, and having a small balance on your mortgage or owning your home outright.
Reverse mortgages can be ideal for homeowners who are retired or no longer bringing home a paycheck and must supplement their fixed income. Rates of interest may be fixed or adjustable while the funds are nontaxable and do not interfere with Social Security or Medicare benefits. Your lender will not take away your residence if you outlive your loan nor will you be required to sell your home to pay off the loan even if the loan balance grows to exceed current property value. If you'd like to find out more about reverse mortgages, feel free to call us at 561-395-4264.