Reverse mortgages (sometimes called "home equity conversion loans") enable older homeowners to benefit from their built-up equity without selling their home. The lender pays you funds based on 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 necessary until the homeowner sells the property, moves (such as into a retirement community) or passes away. You or representative of your estate is obligated to pay back the reverse mortgage amount, interest , and finance charges at the time your property is sold, or you are no longer living in it.
The requirements of a reverse mortgage typically include being sixty-two or older, using the home as your primary residence, and having a low balance on your mortgage or having paid it off.
Reverse mortgages can be advantageous for homeowners who are retired or no longer working but have a need to add to their fixed income. Rates of interest can be fixed or adjustable while the money is nontaxable and doesn't adversely affect Medicare or Social Security benefits. Your lender will not take the property away if you outlive your loan nor may you be made to sell your residence to repay your loan even if the loan balance is determined to exceed property value. Contact us at 610-565-3600 if you'd like to explore the advantages of reverse mortgages.