In a reverse mortgage loan (sometimes referred to as a 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 lender pays out money based on the equity you've built-up in your home; you get a lump sum, a monthly payment or a line of credit. Repayment is not necessary until when the borrower puts his home up for sale, moves (such as into a care facility) or dies. When you sell your home or you no longer use it as your primary residence, you (or your estate) are obligated to pay back the lender for the funds you obtained from the reverse mortgage as well as interest among other finance charges.
The conditions of a reverse mortgage often are being sixty-two or older, maintaining your property as your primary residence, and having a low balance on your mortgage or having paid it off.
Reverse mortgages are appropriate for retired homeowners or those who are no longer bringing home a paycheck and have a need to add to their limited income. Social Security and Medicare benefits aren't affected; and the funds are not taxable. Reverse Mortgages can have adjustable or fixed rates. Your lending institution isn't able to take the property away if you outlive your loan nor can you be made to sell your home to pay off your loan amount even when the loan balance is determined to exceed current property value. If you'd like to find out more about reverse mortgages, please call us at 773-557-1000.
