Reverse mortgages (also called "home equity conversion loans") enable older homeowners to use their built-up equity without selling their home. Deciding how you'd prefer to be paid: by a monthly amount, a line of credit, or a one-time payment, you can receive a loan based on your home equity. Paying back your loan isn't necessary until after the homeowner sells the property, moves (such as to a care facility) or dies. At the time you sell your property or you no longer use it as your primary residence, you (or your estate) must pay back the lender for the cash you received from the reverse mortgage as well as interest and other finance charges.
Usually, reverse mortgages are offered to homeowners at least 62 years of age, have a small or zero balance owed against the home and use the property as your principal residence.
Reverse mortgages can be ideal for homeowners who are retired or no longer working and have a need to supplement their limited income. Social Security and Medicare benefits are not affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed rates. Your residence will never be in danger of being taken away from you by the lending institution or sold against your will if you outlive the loan term - even if the current property value creeps under the loan balance. If you'd like to learn more about reverse mortgages, please call us at 610-565-3600.