Reverse mortgages (also called "home equity conversion loans") enable older homeowners to use their equity without having to sell their home. Deciding how you'd prefer to be paid: by a monthly payment amount, a line of credit, or a one-time payment, you may take out a loan based on your home equity. The loan does not have to be paid back until the borrower sells the home, moves away, or passes away. After your house sells or you no longer use it as your main residence, you (or your estate) must repay the lender for the cash you received from your reverse mortgage plus interest and other finance charges.
The conditions of a reverse mortgage loan usually are being sixty-two or older, using the property as your primary residence, and having a small balance on your mortgage or owning your home outright.
Reverse mortgages are ideal for retired homeowners or those who are no longer working and must add to their fixed income. Social Security and Medicare benefits aren't affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed rates. The lender isn't able to take away your property if you live past the loan term nor will you be obligated to sell your residence to repay your loan amount even if the balance is determined to exceed property value. If you would like to learn more about reverse mortgages, please contact us at (650) 689-5684.
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