In a reverse mortgage loan (also called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. The lending institution pays out money determined by the equity you've built up in your home; you receive a one-time amount, a monthly payment, or a line of credit. The borrowed money doesn't have to be repaid until the borrower sells his home, moves out, or dies. After your home has been sold or you no longer use it as your main residence, you (or your estate) are required to repay the lender for the money you obtained from the reverse mortgage as well as interest among other fees.
Are you Eligible?
Most reverse mortgages require you to be at least sixty-two years of age, have a low or zero balance in a mortgage, and use the property as your principal residence.
Reverse mortgages are ideal for retired homeowners or those who are no longer bringing home a paycheck and need to supplement their income. Rates of interest may be fixed or adjustable and the money is nontaxable and does not affect Social Security or Medicare benefits. The lender can't take the property away if you live past the loan term nor may you be made to sell your residence to repay the loan even if the loan balance is determined to exceed the current property value.
Channel Mortgage LLC can answer questions about reverse mortgages. Schedule a call with a loan officer