In a reverse mortgage (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lending institution gives you money determined by the equity you've built-up in your home; you get a one-time amount, a monthly payment or a line of credit. Repayment is not required until the borrower sells the property, moves (such as to a retirement community) or passes away. You or representative of your estate must repay the reverse mortgage loan, interest accrued, and other finance fees when your home is sold, or you no longer live in it.
The requirements of a reverse mortgage generally are being 62 or older, maintaining your property as your primary residence, and having a low balance on your mortgage or owning your home outright.
Many homeowners who live on a limited income and find themselves needing additional funds find reverse mortgages advantageous for their situation. Social Security and Medicare benefits can not be affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed rates. Your lending institution can't take away your property if you live past the loan term nor may you be required to sell your home to repay the loan even if the loan balance grows to exceed current property value. Call us at 610-565-3600 if you'd like to explore the benefits of reverse mortgages.