With a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. The lender gives you money determined by the equity you've built-up in your home; you get a lump sum, a payment every month or a line of credit. Repayment isn't necessary until when the homeowner sells the property, moves (such as into a care facility) or passes away. At the time your house has been sold or you no longer use it as your primary residence, you (or your estate) have to repay the lender for the funds you obtained from the reverse mortgage in addition to interest among other finance charges.
The requirements of a reverse mortgage typically include being 62 or older, using the house as your main residence, and holding a small balance on your mortgage or owning your home outright.
Many homeowners who live on a fixed income and find themselves needing additional funds find reverse mortgages helpful for their circumstance. Rates of interest may be fixed or adjustable and the funds are nontaxable and do not interfere with Medicare or Social Security benefits. Your lending institution will not take the property away if you live past the loan term nor can you be required to sell your residence to repay the loan even when the balance grows to exceed current property value. Contact us at 703-288-0777 if you would like to explore the advantages of reverse mortgages.
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