In a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. The lending institution gives you money based on the equity you've accrued in your home; you get a one-time amount, a payment every month or a line of credit. The loan doesn't have to be repaid until the homeowner sells his residence, moves away, or passes away. You or representative of your estate must pay back the reverse mortgage amount, interest accrued, and finance fees when your property is sold, or you no longer live in it.
The requirements of a reverse mortgage generally include being sixty-two or older, maintaining the house as your main residence, and having a small balance on your mortgage or owning your home outright.
Reverse mortgages can be advantageous for homeowners who are retired or no longer working and have a need to supplement their income. Rates of interest may be fixed or adjustable while the money is nontaxable and does not affect Social Security or Medicare benefits. The residence can never be at risk of being taken away by the lending institution or sold against your will if you live longer than the loan term - even if the property value dips under the loan balance. Call us at (941) 954-4252 if you would like to explore the advantages of reverse mortgages.