Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to use their equity without the necessity of selling their home. The lender gives you money based on your home equity amount; you get a lump sum, a payment each month or a line of credit. Paying back your loan isn't required until the time the homeowner sells the home, moves (such as to a care facility) or passes away. You or an estate representative is obligated to pay back the reverse mortgage loan, interest accrued, and other finance charges at the time your property is sold, or you are no longer living in it.
Typically, reverse mortgages require you be at least sixty-two years old, have a small or zero balance owed against your home and use the home as your principal residence.
Reverse mortgages are helpful for retired homeowners or those who are no longer bringing home a paycheck but have a need to supplement their income. Rates of interest may be fixed or adjustable and the funds are nontaxable and don't adversely affect Medicare or Social Security benefits. Your lender will not take away your residence if you live past the loan term nor will you be made to sell your residence to pay off the loan even when the loan balance is determined to exceed property value. Call us at (718) 639-9500 to look into your reverse mortgage options.
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