In a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. Deciding how you'd prefer to to receive your money: by a monthly payment, a line of credit, or a one-time payment, you can take out a loan amount determined by your home equity. The loan does not have to be paid back until the borrower sells the residence, moves away, or dies. After you sell your property or you no longer use it as your primary residence, you (or your estate) have to pay back the lending institution for the funds you received from your reverse mortgage in addition to interest among other fees.
Most reverse mortgages are offered to homeowners at least 62 years old, have a small or zero balance in a mortgage and maintain the house as your main living place.
Many homeowners who are on a limited income and find themselves needing additional money find reverse mortgages helpful for their situation. Social Security and Medicare benefits are not affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. The lending institution can't take the property away if you live past the loan term nor may you be required to sell your home to repay the loan even if the loan balance is determined to exceed current property value. If you'd like to learn more about reverse mortgages, feel free to call us at 818-889-7300.
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