With a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without selling their homes. The lending institution gives you money determined by your home equity amount; you get a one-time amount, a monthly payment or a line of credit. Paying back your loan is not required until when the homeowner sells the property, moves (such as to a retirement community) or dies. You or representative of your estate must pay back the reverse mortgage loan, interest , and other finance fees at the time your house is sold, or you can no longer use it as your primary residence.
Typically, reverse mortgages are appropriate for homeowners who are at least sixty-two years old, have a low or zero balance owed against the home and use the property as your principal residence.
Homeowners who are on a limited income and find themselves needing additional funds find reverse mortgages advantageous for their circumstance. Rates of interest may be fixed or adjustable and the funds are nontaxable and don't adversely affect Social Security or Medicare benefits. Your home is never at risk of being taken away from you by the lending institution or put up for sale against your will if you live past your loan term - even if the property value dips under the balance of the loan. If you'd like to find out more about reverse mortgages, please call us at (760) 632-7701.
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