Reverse mortgages (also called "home equity conversion loans") give older homeowners the ability to use their home equity without the necessity of selling their home. The lender pays you money based on the equity you've accrued in your home; you get a one-time amount, a payment each month or a line of credit. Paying back your loan is not necessary until the time the homeowner sells the home, moves (such as into a retirement community) or dies. When your house sells or you no longer use it as your main residence, you (or your estate) must repay the lender for the funds you received from the reverse mortgage in addition to interest among other finance charges.
Typically, reverse mortgages are appropriate for homeowners who are at least 62 years of age, have a low or zero balance in a mortgage and use the house as your main living place.
Reverse mortgages are great for homeowners who are retired or no longer working and have a need to add to their income. Rates of interest can be fixed or adjustable while the money is nontaxable and doesn't affect Medicare or Social Security benefits. Your residence will never be in danger of being taken away by the lending institution or put up for sale without your consent if you outlive your loan term - even if the current property value dips below the loan balance. If you would like to find out more about reverse mortgages, please contact us at 941-504-1445.
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