Reverse mortgages (sometimes called "home equity conversion loans") enable older homeowners to use their built-up home equity without having to sell their home. The lending institution gives you money based on your home equity amount; you receive a lump sum, a monthly payment or a line of credit. The loan does not have to be paid back until the homeowner sells his residence, moves out, or passes away. At the time your home has been sold or you no longer use it as your main residence, you (or your estate) must pay back the lending institution for the cash you obtained from the reverse mortgage plus interest among other fees.
Typically, reverse mortgages are available for borrowers who are at least sixty-two years old, have a low or zero balance owed against your home and maintain the home as your main residence.
Reverse mortgages are great for homeowners who are retired or no longer working and must add to their limited income. Social Security and Medicare benefits can not be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. The lender is not able to take the property away if you outlive your loan nor may you be required to sell your home to repay the loan even if the balance grows to exceed current property value. Call us at 610-565-3600 to look into your reverse mortgage options.