Reverse mortgages (sometimes called "home equity conversion loans") give older homeowners the ability to use their built-up home equity without the necessity of selling their home. The lender pays out funds determined by the equity you've accrued in your home; you receive a one-time amount, 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 away, or passes away. After your house sells or is no longer used as your primary residence, you (or your estate) have to pay back the lending institution for the funds you got from your reverse mortgage as well as interest among other fees.
Usually, reverse mortgages require youto be at least 62 years of age, have a low or zero balance owed against the home and use the property as your principal living place.
Many homeowners who live on a limited income and need additional funds find reverse mortgages helpful for their circumstance. Interest rates can be fixed or adjustable while the money is nontaxable and does not interfere with Social Security or Medicare benefits. Your house is never at risk of being taken away from you by the lending institution or sold against your will if you outlive the loan term - even if the property value goes below the loan balance. If you'd like to find out more about reverse mortgages, feel free to call us at 972.798.2110.