Reverse Mortgages:the Facts
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In a reverse mortgage (also called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lending institution gives you funds based on your home equity amount; you get a lump sum, a payment every month or a line of credit. Paying back your loan is not necessary until after the homeowner puts his home up for sale, moves (such as to a retirement community) or dies. When you sell your property or is no longer used as your primary residence, you (or your estate) are required to repay the lender for the money you obtained from the reverse mortgage as well as interest and other finance charges.
Who is Able to Participate?
The conditions of a reverse mortgage usually are being 62 or older, using the house as your main residence, and holding a small remaining mortgage balance or owning your home outright.
Reverse mortgages can be great for homeowners who are retired or no longer working but must add to their income. Social Security and Medicare benefits can not be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. Your lending institution cannot 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 loan balance is determined to exceed property value. If you would like to find out more about reverse mortgages, please call us at 575-769-9006.
At The Mortgage Superstore, we answer questions about reverse mortgages every day. Call us: 575-769-9006.