In a reverse mortgage loan (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. The lender pays out money based on the equity you've accrued in your home; you receive a lump sum, a monthly payment or a line of credit. The loan doesn't have to be repaid until the homeowner sells the home, moves away, or passes away. When your house has been sold or you no longer use it as your primary residence, you (or your estate) are required to repay the lending institution for the money you received from the reverse mortgage in addition to interest and other fees.
The requirements of a reverse mortgage loan normally include being sixty-two or older, using the home as your main living place, and having a low remaining mortgage balance or owning your home outright.
Reverse mortgages can be great for homeowners who are retired or no longer working but need to add to their fixed 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 isn't able to take the property away if you outlive your loan nor may you be required to sell your residence to pay off your loan amount even when the balance is determined to exceed property value. If you'd like to learn more about reverse mortgages, please call us at 561-395-4264.