Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to use their home equity without selling their home. Deciding how you would prefer to to receive your money: by a monthly payment, a line of credit, or a one-time payment, you may get a loan amount determined by your home equity. Repayment isn't required until when the borrower sells the home, moves (such as to a care facility) or passes away. You or your estate representative has to pay back the reverse mortgage amount, interest accrued, and finance charges after your home is sold, or you no longer live in it.
Generally, reverse mortgages are available for borrowers at least 62 years of age, have a small or zero balance in a mortgage and maintain the property as your main living place.
Reverse mortgages are advantageous for homeowners who are retired or no longer bringing home a paycheck and have a need to add to their income. Rates of interest may be fixed or adjustable and the money is nontaxable and doesn't adversely affect Social Security or Medicare benefits. Your lending institution is not able to take the property away if you live past the loan term nor may you be made to sell your home to repay your loan even when the loan balance grows to exceed property value. If you would like to learn more about reverse mortgages, please contact us at 954.920.9799.
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