Reverse Mortgages:the Facts
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With a reverse mortgage (also referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. The lender gives you money based on the equity you've accrued in your home; you receive a one-time amount, a payment every month or a line of credit. Paying back your loan isn't required until the borrower sells the home, moves (such as to a retirement community) or dies. You or an estate representative must repay the reverse mortgage funds, interest accrued, and other finance charges at the time your home is sold, or you can no longer use it as your primary residence.
Who is Able to Participate?
Typically, reverse mortgages are available for borrowers at least 62 years old, have a low or zero balance owed against the home and use the property as your principal residence.
Many homeowners who are on a limited income and need additional funds find reverse mortgages advantageous for their circumstance. Social Security and Medicare benefits aren't affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. Your residence is never in danger of being taken away from you by the lending institution or sold without your consent if you live past the loan term - even if the current property value dips under the balance of the loan. If you'd like to learn more about reverse mortgages, please call us at (909) 467-1090.