With a reverse mortgage loan (sometimes 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 lender gives you money determined by your home equity amount; you get a lump sum, a payment each month or a line of credit. Repayment isn't necessary until after the borrower puts his home up for sale, moves (such as into a retirement community) or dies. When you sell your property or you no longer use it as your primary residence, you (or your estate) must pay back the lending institution for the cash you received from the reverse mortgage as well as interest and other fees.
Generally, reverse mortgages are available for borrowers who are at least 62 years old, have a low or zero balance owed against the home and maintain the home as your main living place. In certain circumstances a Reverse Mortgage may also be used to purchase your principal residence.
Many homeowners who live on a limited income and have a need for additional funds find reverse mortgages advantageous for their circumstance. Social Security and Medicare benefits aren't affected; and the funds are not taxable. Reverse Mortgages can have adjustable or fixed interest rates. The house is never at risk of being taken away from you by the lending institution or sold against your will if you live longer than the loan term - even if the property value creeps below the balance of the loan. If you would like to find out more about reverse mortgages, please call us at (909) 467-1090.
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