Reverse Mortgages:the Facts
In a reverse mortgage loan (also referred to as a a home equity conversion loan), homeowners 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 monthly payment or a line of credit. The borrowed money does not have to be repaid until the borrower sells his residence, moves away, or passes away. You or an estate representative has to repay the reverse mortgage loan, interest , and other finance charges when your house is sold, or you are no longer living in it.
Who can Participate?
The requirements of a reverse mortgage loan generally include being sixty-two or older, maintaining the property as your primary residence, and having a low remaining mortgage balance or owning your home outright.
Reverse mortgages are advantageous for homeowners who are retired or no longer working and need to supplement their limited income. Social Security and Medicare benefits won't be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. The lender is not able to take away your property if you live past the loan term nor can you be forced to sell your home to repay the loan even when the balance grows to exceed property value. If you would like to learn more about reverse mortgages, feel free to contact us at 859-795-1846.