In a reverse mortgage (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. Deciding how you prefer to be paid: by a monthly payment, a line of credit, or a lump sum, you can take out a loan amount determined by your equity. Paying back your loan isn't required until when the homeowner puts his home up for sale, moves (such as into a retirement community) or dies. You or an estate representative is required to repay the reverse mortgage funds, interest , and other finance charges at the time your house is sold, or you are no longer living in it.
Typically, reverse mortgages are appropriate for borrowers who are at least 62 years old, have a low or zero balance owed against the home and use the property as your main residence.
Reverse mortgages can be appropriate for homeowners who are retired or no longer working but must add to their income. Rates of interest may be fixed or adjustable and the funds are nontaxable and don't affect Social Security or Medicare benefits. Your lending institution is not able to take away your house if you live past the loan term nor will you be forced to sell your residence to repay your loan even when the loan balance is determined to exceed current property value. Call us at (408) 626-1879 if you want to explore the advantages of reverse mortgages.
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