Reverse mortgages (sometimes referred to as "home equity conversion loans") give older homeowners the ability to benefit from their home equity without selling their home. The lender pays you money determined by your home equity amount; you receive a lump sum, a payment each month or a line of credit. Repayment isn't required until the time the homeowner sells the home, moves (such as to a care facility) or dies. At the time your home sells or you no longer use it as your primary residence, you (or your estate) must pay back the lending institution for the money you received from the reverse mortgage plus interest and other finance charges.
The requirements of a reverse mortgage usually are being 62 or older, maintaining your home as your main living place, and holding a low balance on your mortgage or having paid it off.
Reverse mortgages are great for retired homeowners or those who are no longer bringing home a paycheck but have a need to supplement their limited income. Interest rates can be fixed or adjustable and the funds are nontaxable and don't affect Medicare or Social Security benefits. The lender cannot take away your home if you live past the loan term nor will you be forced to sell your residence to pay off your loan amount even when the balance is determined to exceed current property value. Call us at (941) 954-4252 if you'd like to explore the advantages of reverse mortgages.