With a reverse mortgage (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without having to sell their homes. The lending institution pays you funds based on the equity you've accrued in your home; you receive a lump sum, a monthly payment or a line of credit. The loan doesn't have to be repaid until the borrower sells his home, moves out, or dies. After you sell your property or you no longer use it as your primary residence, you (or your estate) have to repay the lender for the funds you received from the reverse mortgage in addition to interest and other fees.
Typically, reverse mortgages require youto be at least sixty-two years old, have a small or zero balance in a mortgage and use the home as your main residence.
Many homeowners who live on a fixed income and have a need for additional funds find reverse mortgages advantageous for their situation. Interest rates can be fixed or adjustable while the funds are nontaxable and don't adversely affect Social Security or Medicare benefits. Your house will never be in danger of being taken away by the lending institution or sold against your will if you outlive your loan term - even if the current property value goes under the loan balance. If you would like to learn more about reverse mortgages, feel free to contact us at 941-504-1445.
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