Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to use their built-up home equity without selling their home. Choosing between a monthly payment amount, a line of credit, or a lump sum, you can get a loan based on your equity. The loan doesn't have to be paid back until the homeowner sells the residence, moves out, or dies. After your house sells or you no longer use it as your main residence, you (or your estate) have to pay back the lender for the funds you received from the reverse mortgage plus interest and other finance charges.
Most reverse mortgages require you be at least 62 years old, have a small or zero balance owed against your home and maintain the home as your main residence.
Homeowners who are on a limited income and find themselves needing additional funds find reverse mortgages ideal for their situation. Rates of interest can be fixed or adjustable and the money is nontaxable and doesn't adversely affect Medicare or Social Security benefits. The house will never be at risk of being taken away by the lending institution or sold against your will if you live past the loan term - even if the property value dips under the loan balance. If you'd like to find out more about reverse mortgages, feel free to call us at 954.920.9799.
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