In a reverse mortgage loan (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lender pays out funds determined by the equity you've accrued in your home; you receive a one-time amount, a monthly payment or a line of credit. The borrowed money doesn't have to be paid back until the borrower sells the residence, moves out, or passes away. At the time you sell your home or you no longer use it as your primary residence, you (or your estate) have to repay the lender for the money you obtained from your reverse mortgage in addition to interest and other finance charges.
Most reverse mortgages require you be at least sixty-two years old, have a small or zero balance owed against the home and use the house as your main residence.
Reverse mortgages can be advantageous for retired homeowners or those who are no longer bringing home a paycheck but must supplement their fixed income. Social Security and Medicare benefits can not be affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed rates. Your lending institution will not take the property away if you live past the loan term nor can you be obligated to sell your home to repay the loan even if the loan balance grows to exceed current property value. Contact us at 305-608-8808 if you'd like to explore the benefits of reverse mortgages.
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