In a reverse mortgage loan (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. The lending institution gives you funds based on your home equity amount; you receive a one-time amount, a payment each month or a line of credit. Repayment isn't necessary until the time the borrower puts his home up for sale, moves (such as to a care facility) or passes away. You or your estate representative must repay the reverse mortgage loan, interest accrued, and finance charges at the time your property is sold, or you can no longer use it as your primary residence.
The requirements of a reverse mortgage usually include being 62 or older, maintaining the house as your main living place, and having a low balance on your mortgage or having paid it off.
Many homeowners who live on a fixed income and find themselves needing additional funds find reverse mortgages advantageous for their situation. Social Security and Medicare benefits won't be affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. Your lending institution cannot take the property away if you outlive your loan nor can you be obligated to sell your residence to repay your loan amount even if the loan balance grows to exceed current property value. Contact us at 562 320-0510 if you want to explore the benefits of reverse mortgages.
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