In a reverse mortgage loan (also called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. The lending institution gives you funds determined by your home equity amount; you receive a one-time amount, a payment every month or a line of credit. The loan does not have to be repaid until the borrower sells the home, moves out, or passes away. You or representative of your estate is obligated to repay the reverse mortgage amount, interest accrued, and finance charges when your home is sold, or you can no longer use it as your primary residence.
Usually, reverse mortgages are available for homeowners at least sixty-two years of age, have a small or zero balance owed against the home and use the property as your main residence.
Reverse mortgages are ideal for retired homeowners or those who are no longer working but must add to their fixed income. Interest rates can be fixed or adjustable while the funds are nontaxable and don't affect Medicare or Social Security benefits. The residence will never be in danger of being taken away from you by the lending institution or put up for sale without your consent if you live longer than your loan term - even if the property value goes below the loan balance. If you would like to learn more about reverse mortgages, feel free to call us at 562 320-0510.
Do you have a question regarding a mortgage program?