Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to tap into built-up home equity without having to sell their home. The lending institution pays you money determined by the equity you've accrued in your home; you get a one-time amount, a monthly payment or a line of credit. The loan does not have to be repaid until the homeowner sells his residence, moves away, or dies. After your home has been sold or you no longer use it as your primary residence, you (or your estate) have to pay back the lending institution for the cash you got from your reverse mortgage plus interest and other fees.
The requirements of a reverse mortgage loan usually include being 62 or older, maintaining your property as your primary residence, and holding a small remaining mortgage balance or having paid it off.
Homeowners who live on a limited income and have a need for additional money find reverse mortgages advantageous for their situation. Social Security and Medicare benefits aren't affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. Your lender can't take away your home if you live past the loan term nor may you be forced to sell your home to repay the loan even if the balance grows to exceed current property value. Call us at 562 320-0510 if you would like to explore the advantages of reverse mortgages.
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