Reverse mortgages (sometimes called "home equity conversion loans") give older homeowners the ability to use their built-up home equity without selling their home. The lending institution pays out funds based on the equity you've accrued in your home; you get a lump sum, a monthly payment or a line of credit. Paying back your loan is not required until after the borrower puts his home up for sale, moves (such as into a care facility) or passes away. You or representative of your estate must pay back the reverse mortgage loan, interest accrued, and finance fees at the time your home is sold, or you are no longer living in it.
The requirements of a reverse mortgage usually include being sixty-two or older, using the house as your main residence, and holding a low balance on your mortgage or having paid it off.
Reverse mortgages are appropriate for retired homeowners or those who are no longer working but need to supplement their income. Social Security and Medicare benefits can't be affected; and the funds are nontaxable. Reverse Mortgages may have adjustable or fixed interest rates. Your house is never in danger of being taken away from you by the lender or put up for sale against your will if you live longer than the loan term - even if the property value creeps below the loan balance. Contact us at (303) 931-7879 if you would like to explore the advantages of reverse mortgages.