In a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lender pays out funds determined by your home equity amount; you get a one-time amount, a monthly payment or a line of credit. Paying back your loan is not required until the time the borrower sells the property, moves (such as to a retirement community) or dies. You or an estate representative must pay back the reverse mortgage loan, interest accrued, and finance fees after your house is sold, or you are no longer living in it.
The conditions of a reverse mortgage often are being 62 or older, maintaining the house as your primary residence, and having a low balance on your mortgage or owning your home outright.
Homeowners who are on a fixed income and need additional money find reverse mortgages helpful for their situation. Interest rates can be fixed or adjustable and the money is nontaxable and doesn't interfere with Medicare or Social Security benefits. Your lending institution is not able to take the property away if you outlive your loan nor can you be obligated to sell your home to repay your loan amount even when the balance is determined to exceed property value. If you'd like to find out more about reverse mortgages, feel free to contact us at (941) 954-4252.