In a reverse mortgage (also called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. The lender pays out funds determined by the equity you've accrued in your home; you get a one-time amount, a monthly payment or a line of credit. Repayment isn't required until the time the homeowner sells the home, moves (such as into a retirement community) or dies. At the time your home sells or is no longer used as your primary residence, you (or your estate) have to repay the lender for the cash you received from the reverse mortgage in addition to interest and other finance charges.
Most reverse mortgages are offered to borrowers who are at least sixty-two years old, have a small or zero balance in a mortgage and maintain the house as your principal living place.
Reverse mortgages are advantageous for homeowners who are retired or no longer working but have a need to add to their fixed income. Social Security and Medicare benefits can't be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. The house is never in danger of being taken away by the lender or put up for sale without your consent if you live longer than your loan term - even if the current property value creeps under the loan balance. Call us at 610-565-3600 if you would like to explore the advantages of reverse mortgages.