Reverse mortgages (also called "home equity conversion loans") enable older homeowners to use their equity without the necessity of selling their home. The lending institution gives you funds based on the equity you've accrued in your home; you receive 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 to a care facility) or dies. At the time your house sells or you no longer use it as your primary residence, you (or your estate) are required to repay the lender for the cash you got from the reverse mortgage plus interest and other fees.
The requirements of a reverse mortgage typically include being 62 or older, using the property as your primary living place, and having a low remaining mortgage balance or having paid it off.
Many homeowners who are on a limited income and need additional money find reverse mortgages advantageous for their situation. Rates of interest may be fixed or adjustable and the funds are nontaxable and do not adversely affect Medicare or Social Security benefits. Your lending institution isn't able to take the property away if you outlive your loan nor may you be forced to sell your residence to repay the loan amount even when the loan balance grows to exceed current property value. If you would like to find out more about reverse mortgages, feel free to call us at 9722039033.