Reverse mortgages (sometimes referred to as “home equity conversion loans”) enable older homeowners to use their equity without having to sell their home. The lender pays out funds based on your home equity amount; you receive a lump sum, a payment each month or a line of credit. Paying back your loan isn’t necessary until the time the borrower puts his home up for sale, moves (such as into a retirement community) or passes away. At the time you sell your home or is no longer used as your primary residence, you (or your estate) are required to pay back the lending institution for the funds you received from your reverse mortgage as well as interest and other fees.
Who is Eligible?
The requirements of a reverse mortgage loan often are being sixty-two or older, using the property as your primary living place, and holding a small balance on your mortgage or having paid it off.
Reverse mortgages are helpful for retired homeowners or those who are no longer working and need to supplement their fixed income. Social Security and Medicare benefits can not be affected; and the money is not taxable. Reverse Mortgages can have adjustable or fixed interest rates. Your lender isn’t able to take away your property if you live past the loan term nor may you be made to sell your home to repay the loan even if the loan balance is determined to exceed current property value. If you’d like to learn more about reverse mortgages, feel free to call us at 619-226-3234.
