With 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. Deciding how you prefer to be paid: by a monthly payment amount, a line of credit, or a lump sum, you may take out a loan based on your equity. Repayment isn't required until the time the borrower puts his home up for sale, moves (such as into a retirement community) or passes away. At the time your house sells or is no longer used as your primary residence, you (or your estate) are required to repay the lending institution for the money you obtained from the reverse mortgage plus interest and other finance charges.
The conditions of a reverse mortgage typically include being sixty-two or older, maintaining the property as your main living place, and holding a low remaining mortgage balance or having paid it off.
Reverse mortgages can be advantageous for homeowners who are retired or no longer working but need to supplement their limited income. Rates of interest may be fixed or adjustable and the money is nontaxable and doesn't adversely affect Medicare or Social Security benefits. The lending institution cannot take the property away if you outlive your loan nor may you be obligated to sell your home to pay off your loan amount even if the loan balance grows to exceed current property value. Call us at (727) 478-2797 to discuss your reverse mortgage options.
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