With a reverse mortgage (also called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. Deciding how you prefer to to receive your money: by a monthly amount, a line of credit, or a one-time payment, you can get a loan amount determined by your home equity. Paying back your loan is not required until the time the homeowner puts his home up for sale, moves (such as to a retirement community) or dies. At the time you sell your home or is no longer used as your primary residence, you (or your estate) are obligated to repay the lender for the money you received from your reverse mortgage plus interest among other fees.
The requirements of a reverse mortgage loan generally are being 62 or older, maintaining the home as your main residence, and holding a small remaining mortgage balance or having paid it off.
Homeowners who live on a fixed income and have a need for additional funds find reverse mortgages advantageous for their situation. Rates of interest can be fixed or adjustable while the funds are nontaxable and don't interfere with Medicare or Social Security benefits. The lending institution can't take away your residence if you live past the loan term nor may you be forced to sell your home to repay your loan amount even when the balance grows to exceed current property value. If you would like to find out more about reverse mortgages, feel free to call us at (718) 639-9500.
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