In a reverse mortgage loan (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without selling their homes. The lender gives you funds determined by the equity you've built-up in your home; you receive a one-time amount, a monthly payment or a line of credit. Paying back your loan isn't required until when the borrower sells the home, moves (such as to a care facility) or passes away. When you sell your home or you no longer use it as your primary residence, you (or your estate) have to pay back the lending institution for the cash you obtained from the reverse mortgage as well as interest and other fees.
Typically, reverse mortgages are appropriate for borrowers at least 62 years of age, have a small or zero balance in a mortgage and use the house as your main living place.
Homeowners who are on a limited income and need additional money find reverse mortgages ideal for their circumstance. Interest rates may be fixed or adjustable while the funds are nontaxable and do not adversely affect Medicare or Social Security benefits. The house is never in danger of being taken away by the lender or sold against your will if you live past the loan term - even if the property value creeps below the loan balance. Call us at 610-565-3600 to discuss your reverse mortgage options.