Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to tap into built-up equity without selling their home. The lending institution pays out funds based on your home equity amount; you get a one-time amount, a payment every month or a line of credit. Paying back your loan isn't required until the time the borrower sells the home, moves (such as to a retirement community) or passes away. You or representative of your estate is obligated to repay the reverse mortgage funds, interest accrued, and other finance fees at the time your home is sold, or you no longer live in it.
The conditions of a reverse mortgage loan normally include being 62 or older, using the home as your primary living place, and having a low remaining mortgage balance or having paid it off.
Homeowners who live on a fixed income and need additional money find reverse mortgages helpful for their circumstance. Social Security and Medicare benefits can not be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. Your home will never be in danger of being taken away by the lender or sold against your will if you outlive the loan term - even if the current property value dips below the loan balance. If you'd like to learn more about reverse mortgages, feel free to contact us at 561-395-4264.