In a reverse mortgage loan (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without selling their homes. 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 borrower sells the residence, moves out, or passes away. After your house sells or you no longer use it as your primary residence, you (or your estate) have to pay back the lender for the cash you got from your reverse mortgage in addition to interest among other fees.
The conditions of a reverse mortgage typically include being 62 or older, maintaining your home as your primary residence, and holding a small remaining mortgage balance or owning your home outright.
Reverse mortgages are helpful for homeowners who are retired or no longer bringing home a paycheck and must add to their limited income. Social Security and Medicare benefits won't be affected; and the funds are not taxable. Reverse Mortgages can have adjustable or fixed rates. Your lending institution will not take the property away if you live past the loan term nor will you be obligated to sell your residence to pay off the loan even if the balance grows to exceed current property value. Call us at 941-504-1445 if you would like to explore the benefits of reverse mortgages.
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