Reverse mortgages (also called "home equity conversion loans") enable older homeowners to benefit from their home equity without selling their home. The lending institution pays out money based on the equity you've accrued in your home; you receive a lump sum, a monthly payment or a line of credit. Paying back your loan isn't necessary until when the borrower sells the home, moves (such as to a care facility) or passes away. You or representative of your estate has to pay back the reverse mortgage loan, interest , and finance fees at the time your property is sold, or you can no longer call it your primary residence.
Generally, reverse mortgages are appropriate for homeowners who are at least 62 years old, have a small or zero balance owed against the home and maintain the home as your main residence.
Reverse mortgages are helpful for homeowners who are retired or no longer working but must add to their limited income. Social Security and Medicare benefits can't be affected; and the funds are not taxable. Reverse Mortgages can have adjustable or fixed rates. Your lending institution can't take the property away if you live past the loan term nor will you be required to sell your residence to pay off the loan amount even when the loan balance is determined to exceed current property value. If you would like to learn more about reverse mortgages, please call us at 954.920.9799.
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