In a reverse mortgage loan (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without selling their homes. Deciding how you'd prefer to be paid: by a monthly payment, a line of credit, or a one-time payment, you may receive a loan amount determined by your equity. The borrowed money does not have to be paid back until the borrower sells his residence, moves away, or dies. You or representative of your estate is required to pay back the reverse mortgage amount, interest , and finance fees after your house is sold, or you can no longer use it as your primary residence.
The requirements of a reverse mortgage normally are being 62 or older, using the home as your primary residence, and holding a low balance on your mortgage or having paid it off.
Reverse mortgages can be appropriate for homeowners who are retired or no longer working but have a need to add to their fixed income. Social Security and Medicare benefits won't be affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed interest rates. The home can never be in danger of being taken away by the lender or sold without your consent if you live longer than the loan term - even if the current property value goes under the balance of the loan. If you'd like to learn more about reverse mortgages, feel free to call us at (512) 291-6100.
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