Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to use their built-up equity without selling their home. Choosing between a monthly payment, a line of credit, or a lump sum, you can get a loan amount determined by your equity. Repayment isn't required until when the borrower puts his home up for sale, moves (such as into a retirement community) or dies. After your home sells or is no longer used as your main residence, you (or your estate) must repay the lending institution for the cash you got from the reverse mortgage in addition to interest among other fees.
Typically, reverse mortgages require youto be at least 62 years of age, have a low or zero balance owed against the home and use the home as your main living place.
Reverse mortgages can be helpful 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. Your lender will not take away your residence if you live past the loan term nor will you be obligated to sell your home to repay the loan amount even if the loan balance is determined to exceed current property value. Contact us at (408) 626-1879 to discuss your reverse mortgage options.
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