Reverse mortgages (also referred to as "home equity conversion loans") enable older homeowners to tap into built-up equity without the necessity of selling their home. The lender pays you money based on your home equity amount; you get a one-time amount, a monthly payment or a line of credit. Paying back your loan is not required until after the borrower sells the home, moves (such as to a care facility) or passes away. You or an estate representative has to repay the reverse mortgage funds, interest accrued, and finance fees when your property is sold, or you no longer live in it.
The requirements of a reverse mortgage normally include being 62 or older, maintaining the property as your primary living place, and having a small balance on your mortgage or owning your home outright.
Homeowners who are on a limited income and find themselves needing additional money find reverse mortgages helpful for their situation. Rates of interest may be fixed or adjustable while the money is nontaxable and doesn't affect Medicare or Social Security benefits. The residence can never be in danger of being taken away by the lending institution or put up for sale without your consent if you live longer than your loan term - even if the property value creeps below the balance of the loan. Contact us at (408) 626-1879 if you would like to explore the benefits of reverse mortgages.
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