With a reverse mortgage loan (also referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. Choosing between a monthly payment, a line of credit, or a one-time payment, you may get a loan based on your home equity. Paying back your loan isn't required until after the homeowner sells the home, moves (such as to a care facility) or dies. At the time your house has been sold or you no longer use it as your main residence, you (or your estate) have to repay the lending institution for the money you obtained from your reverse mortgage plus interest among other finance charges.
Usually, reverse mortgages are offered to borrowers at least 62 years old, have a low or zero balance in a mortgage and use the property as your principal living place.
Many homeowners who are on a fixed income and have a need for additional money find reverse mortgages ideal for their circumstance. Interest rates can be fixed or adjustable while the funds are nontaxable and don't adversely affect Social Security or Medicare benefits. Your home is never in danger of being taken away by the lender or put up for sale without your consent if you outlive the loan term - even if the property value creeps under the balance of the loan. If you would like to find out more about reverse mortgages, please contact us at (408) 626-1879.
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