Reverse mortgages (also called "home equity conversion loans") give older homeowners the ability to tap into built-up home equity without selling their home. Deciding how you'd prefer to to receive your money: by a monthly amount, a line of credit, or a lump sum, you may get a loan amount determined by your home equity. The loan does not have to be repaid until the homeowner sells the home, moves out, or passes away. When you sell your property or you no longer use it as your primary residence, you (or your estate) have to repay the lending institution for the cash you received from your reverse mortgage in addition to interest among other fees.
The requirements of a reverse mortgage generally include being sixty-two or older, using the home as your primary residence, and having a low remaining mortgage balance or having paid it off.
Reverse mortgages can be ideal for retired homeowners or those who are no longer working but have a need to supplement their limited income. Interest rates can be fixed or adjustable while the money is nontaxable and does not adversely affect Social Security or Medicare benefits. Your lending institution can't take away your residence if you outlive your loan nor may you be forced to sell your home to repay the loan amount even when the loan balance is determined to exceed property value. If you would like to find out more about reverse mortgages, feel free to contact us at (727) 478-2797.
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