Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to tap into equity without having to sell their home. The lending institution pays out funds based on the equity you've accrued in your home; you receive a lump sum, a payment every month or a line of credit. The borrowed money does not have to be repaid until the homeowner sells his residence, moves out, or passes away. You or representative of your estate is required to pay back the reverse mortgage loan, interest accrued, and finance charges when your house is sold, or you are no longer living in it.
Most reverse mortgages require you be at least 62 years of age, have a low or zero balance in a mortgage and maintain the property as your main residence.
Reverse mortgages can be advantageous for retired homeowners or those who are no longer bringing home a paycheck and need to supplement their fixed income. Rates of interest may be fixed or adjustable while the money is nontaxable and does not interfere with Social Security or Medicare benefits. Your house is never in danger of being taken away by the lender or put up for sale against your will if you live longer than your loan term - even if the current property value dips below the loan balance. If you would like to find out more about reverse mortgages, feel free to contact us at 623-340-0934.
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