Reverse Mortgages:the Facts
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In a reverse mortgage (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. The lending institution gives you funds determined by the equity you've built-up in your home; you get a one-time amount, a monthly payment or a line of credit. Paying back your loan is not required until the time the borrower sells the home, moves (such as to a care facility) or passes away. You or an estate representative is obligated to repay the reverse mortgage loan, interest , and other finance charges when your house is sold, or you no longer live in it.
Are you Eligible?
Usually, reverse mortgages require youto be at least 62 years old, have a low or zero balance in a mortgage and use the house as your main residence.
Many homeowners who live on a fixed income and find themselves needing additional funds find reverse mortgages helpful for their situation. Interest rates can be fixed or adjustable while the funds are nontaxable and don't interfere with Social Security or Medicare benefits. Your lender cannot take the property away if you live past the loan term nor can you be made to sell your residence to pay off the loan even if the balance grows to exceed property value. If you'd like to find out more about reverse mortgages, please contact us at (909) 467-1090.