Reverse Mortgages:the Facts
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With a reverse mortgage loan (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without having to sell their homes. Choosing between a monthly amount, a line of credit, or a one-time payment, you may take out a loan amount determined by your home 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 passes away. After your home has been sold or you no longer use it as your main residence, you (or your estate) must repay the lending institution for the funds you obtained from your reverse mortgage plus interest among other finance charges.
Who can Participate?
The requirements of a reverse mortgage often are being 62 or older, using the home as your main living place, and having a low balance on your mortgage or having paid it off.
Many homeowners who live on a fixed income and find themselves needing additional money find reverse mortgages advantageous for their situation. Rates of interest may be fixed or adjustable and the money is nontaxable and doesn't affect Social Security or Medicare benefits. The residence is never at risk of being taken away from you by the lending institution or put up for sale without your consent if you live past the loan term - even if the property value dips below the balance of the loan. If you'd like to find out more about reverse mortgages, feel free to contact us at (909) 467-1090.