Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to benefit from their built-up equity without having to sell their home. The lending institution pays out funds based on the equity you've accrued in your home; you get a one-time amount, a monthly payment or a line of credit. Paying back your loan is not required until after the borrower puts his home up for sale, moves (such as into a care facility) or passes away. When you sell your home or is no longer used as your main residence, you (or your estate) are obligated to pay back the lender for the money you obtained from the reverse mortgage in addition to interest and other finance charges.
Typically, reverse mortgages require you be at least 62 years of age, have a low or zero balance owed against the home and use the house as your principal residence.
Homeowners who live on a limited income and have a need for additional money find reverse mortgages advantageous for their situation. Social Security and Medicare benefits can not be affected; and the money is not taxable. Reverse Mortgages can have adjustable or fixed rates. The lender is not able to take away your residence if you outlive your loan nor will you be obligated to sell your home to pay off your loan even when the balance grows to exceed property value. If you'd like to find out more about reverse mortgages, feel free to call us at (512) 291-6100.
Do you have a question regarding a mortgage program?