In a reverse mortgage (also called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without having to sell their homes. The lender pays you funds determined by the equity you've accrued in your home; you get a one-time amount, a payment every month or a line of credit. Repayment isn't required until when the homeowner puts his home up for sale, moves (such as to a retirement community) or passes away. After you sell your property or is no longer used as your main residence, you (or your estate) must pay back the lender for the funds you obtained from the reverse mortgage plus interest among other fees.
Usually, reverse mortgages are appropriate for homeowners who are at least 62 years of age, have a small or zero balance in a mortgage and use the house as your principal living place.
Homeowners who live on a fixed income and need additional money find reverse mortgages ideal for their situation. Interest rates can be fixed or adjustable while the funds are nontaxable and don't affect Social Security or Medicare benefits. Your home is never in danger of being taken away by the lending institution or sold against your will if you outlive the loan term - even if the property value dips under the loan balance. If you would like to learn more about reverse mortgages, please call us at (303) 931-7879.