In a reverse mortgage loan (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. Deciding how you prefer to be paid: by a monthly payment, a line of credit, or a lump sum, you can take out a loan based on your equity. The borrowed money doesn't have to be paid back until the homeowner sells his home, moves away, or dies. You or an estate representative is obligated to pay back the reverse mortgage funds, interest accrued, and finance fees at the time your house is sold, or you can no longer use it as your primary residence.
The requirements of a reverse mortgage loan often are being 62 or older, using the house as your main residence, and having a low remaining mortgage balance or having paid it off.
Reverse mortgages can be appropriate for homeowners who are retired or no longer working but need to add to their income. Interest rates may be fixed or adjustable while the funds are nontaxable and do not interfere with Medicare or Social Security benefits. Your lending institution cannot take away your home if you live past the loan term nor may you be obligated to sell your home to repay the loan even if the loan balance grows to exceed property value. If you'd like to learn more about reverse mortgages, please contact us at (760) 632-7701.
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