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. The lending institution pays out money determined by your home equity amount; you receive a lump sum, a payment every month or a line of credit. The loan doesn't have to be paid back until the borrower sells the home, moves away, or dies. You or representative of your estate must repay the reverse mortgage funds, interest , and finance fees at the time your house is sold, or you can no longer call it your primary residence.
The requirements of a reverse mortgage loan usually include being sixty-two or older, using the home as your main living place, and having a small remaining mortgage balance or having paid it off.
Homeowners who live on a limited income and need additional funds find reverse mortgages advantageous for their circumstance. Social Security and Medicare benefits can not be affected; and the money is not taxable. Reverse Mortgages may have adjustable or fixed rates. Your home can never be at risk of being taken away by the lender or sold against your will if you live past the loan term - even if the current property value creeps below the balance of the loan. Contact us at (650) 689-5684 if you would like to explore the advantages of reverse mortgages.
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