With a reverse mortgage loan (also called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. Choosing between a monthly payment, a line of credit, or a lump sum, you may get a loan amount determined by your home equity. Repayment is not required until the borrower sells the home, moves (such as into a retirement community) or passes away. After you sell your property or you no longer use it as your main residence, you (or your estate) are required to repay the lender for the funds you got from your reverse mortgage as well as interest and other finance charges.
The conditions of a reverse mortgage loan typically are being sixty-two or older, using the home as your primary living place, and having a small remaining mortgage balance or owning your home outright.
Reverse mortgages are advantageous for homeowners who are retired or no longer bringing home a paycheck but need to supplement their income. Social Security and Medicare benefits are not affected; and the funds are not taxable. Reverse Mortgages can have adjustable or fixed interest rates. The lending institution will not take the property away if you live past the loan term nor can you be forced to sell your residence to pay off the loan amount even when the loan balance grows to exceed current property value. If you would like to learn more about reverse mortgages, feel free to call us at 561-395-4264.