Reverse mortgages (sometimes called "home equity conversion loans") enable older homeowners to benefit from their built-up home equity without the necessity of selling their home. The lending institution gives you money based on the equity you've accrued in your home; you receive a lump sum, a payment each month or a line of credit. The loan does not have to be paid back until the borrower sells the home, moves away, or dies. After you sell your home or you no longer use it as your main residence, you (or your estate) have to pay back the lending institution for the cash you received from your reverse mortgage in addition to interest among other fees.
Most reverse mortgages are offered to borrowers who are at least 62 years of age, have a small or zero balance in a mortgage and use the house as your principal living place.
Reverse mortgages can be helpful for retired homeowners or those who are 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 rates. The residence will never be in danger of being taken away from you by the lending institution or put up for sale against your will if you live past your loan term - even if the property value dips below the balance of the loan. Call us at 610-565-3600 to discuss your reverse mortgage options.