Reverse mortgages (sometimes called "home equity conversion loans") give older homeowners the ability to tap into built-up equity without the necessity of selling their home. The lending institution pays you money determined by your home equity amount; you receive a lump sum, a monthly payment or a line of credit. Repayment isn't required until after the borrower puts his home up for sale, moves (such as into a retirement community) or dies. You or an estate representative has to repay the reverse mortgage amount, interest accrued, and finance charges when your home is sold, or you no longer live in it.
The requirements of a reverse mortgage usually include being sixty-two or older, maintaining the property as your main living place, and holding a low balance on your mortgage or having paid it off.
Homeowners who live on a fixed income and have a need for additional funds find reverse mortgages advantageous for their circumstance. Interest rates can be fixed or adjustable while the money is nontaxable and doesn't affect Medicare or Social Security benefits. The home is never in danger of being taken away by the lending institution or sold without your consent if you outlive your loan term - even if the property value dips below the loan balance. If you would like to learn more about reverse mortgages, feel free to call us at 941-504-1445.
Do you have a question regarding a mortgage program?