Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to benefit from their built-up equity without having to sell their home. Deciding how you'd like to to receive your money: by a monthly payment, a line of credit, or a one-time payment, you can take out a loan based on your home equity. Paying back your loan isn't required until after the borrower sells the property, moves (such as to a care facility) or dies. After your house sells or you no longer use it as your primary residence, you (or your estate) must pay back the lending institution for the money you obtained from the reverse mortgage as well as interest and other fees.
Generally, reverse mortgages require you be at least 62 years old, have a low or zero balance owed against the home and use the home as your main residence.
Reverse mortgages are great for homeowners who are retired or no longer bringing home a paycheck and need to add to their fixed income. Rates of interest may be fixed or adjustable and the funds are nontaxable and do not interfere with Medicare or Social Security benefits. The lender isn't able to take away your house if you outlive your loan nor may you be required to sell your home to repay the loan amount even when the balance grows to exceed current property value. If you'd like to learn more about reverse mortgages, please call us at 562 320-0510.
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