In a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. The lender pays out funds determined by your home equity amount; you receive a one-time amount, a payment every month or a line of credit. The loan does not have to be paid back until the borrower sells his residence, moves away, or passes away. At the time your house sells or you no longer use it as your main residence, you (or your estate) are obligated to pay back the lending institution for the cash you received from your reverse mortgage as well as interest among other finance charges.
Usually, reverse mortgages are appropriate for borrowers who are at least sixty-two years old, have a low or zero balance in a mortgage and maintain the home as your principal residence.
Homeowners who live on a fixed income and have a need for additional funds find reverse mortgages helpful for their situation. Social Security and Medicare benefits can't be affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed interest rates. The lender will not take the property away if you outlive your loan nor will you be obligated to sell your residence to pay off the loan amount even when the loan balance is determined to exceed current property value. If you'd like to learn more about reverse mortgages, feel free to contact us at 5122916100.
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