In a reverse mortgage (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without selling their homes. The lending institution pays out money based on the equity you've accrued in your home; you get a lump sum, a payment every month or a line of credit. The loan does not have to be repaid until the homeowner sells his residence, moves out, or dies. When you sell your home or is no longer used as your primary residence, you (or your estate) have to repay the lending institution for the cash you got from the reverse mortgage as well as interest among other finance charges.
Usually, reverse mortgages require youto be at least sixty-two years of age, have a low or zero balance owed against your home and use the home as your main living place.
Reverse mortgages are ideal for retired homeowners or those who are no longer working but must supplement their income. Social Security and Medicare benefits aren't affected; and the money is not taxable. Reverse Mortgages may have adjustable or fixed interest rates. Your residence can never be in danger of being taken away from you by the lender or sold without your consent 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'd like to explore the advantages of reverse mortgages.
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