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Reverse mortgages (also referred to as “home equity conversion loans”) enable older homeowners to use their built-up equity without the necessity of selling their home. The lending institution pays out money based on the equity you’ve accrued in your home; you receive a one-time amount, a monthly payment or a line of credit. Paying back your loan isn’t necessary until when the homeowner sells the property, moves (such as into a retirement community) or dies. At the time you sell your home or is no longer used as your primary residence, you (or your estate) are required to pay back the lender for the funds you got from your reverse mortgage as well as interest among other finance charges.
Who is Eligible?
Most reverse mortgages are offered to borrowers at least 62 years of age, have a low or zero balance in a mortgage and use the house as your main residence.
Reverse mortgages are appropriate for homeowners who are retired or no longer bringing home a paycheck and have a need to add to their limited income. Interest rates can be fixed or adjustable while the money is nontaxable and does not interfere with Medicare or Social Security benefits. The lending institution cannot take the property away if you outlive your loan nor will you be made to sell your home to pay off the loan amount even when the balance is determined to exceed current property value. If you would like to find out more about reverse mortgages, please contact us at 303-779-0591.