In a reverse mortgage (also referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. The lending institution pays out money determined by the equity you've built-up in your home; you get a one-time amount, a payment every month or a line of credit. Paying back your loan is not required until the borrower puts his home up for sale, moves (such as to a care facility) or passes away. You or representative of your estate is required to pay back the reverse mortgage loan, interest , and other finance fees after your house is sold, or you no longer live in it.
Usually, reverse mortgages require you be at least sixty-two years of age, have a low or zero balance in a mortgage and use the home as your main living place.
Reverse mortgages are advantageous for retired homeowners or those who are no longer bringing home a paycheck but need to add to their limited income. Social Security and Medicare benefits are not affected; and the money is not taxable. Reverse Mortgages can have adjustable or fixed interest rates. The lender cannot take away your home if you outlive your loan nor may you be required to sell your home to repay your loan amount even when the loan balance is determined to exceed property value. Call us at (512) 291-6100 to discuss your reverse mortgage options.
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