Reverse mortgages (sometimes referred to as "home equity conversion loans") give older homeowners the ability to tap into built-up home equity without selling their home. The lender gives you money determined by the equity you've accrued in your home; you get a lump sum, a payment every month or a line of credit. The loan doesn't have to be repaid until the borrower sells his home, moves away, or passes away. When you sell your home or is no longer used as your primary residence, you (or your estate) must repay the lender for the cash you received from your reverse mortgage in addition to interest among other finance charges.
The requirements of a reverse mortgage generally include being 62 or older, maintaining the home as your primary residence, and holding a small balance on your mortgage or owning your home outright.
Many homeowners who are on a limited income and find themselves needing additional money find reverse mortgages ideal for their situation. Social Security and Medicare benefits are not affected; and the funds are nontaxable. Reverse Mortgages may have adjustable or fixed interest rates. Your residence can never be in danger of being taken away by the lender or put up for sale against your will if you live past the loan term - even if the current property value dips under the loan balance. If you'd like to find out more about reverse mortgages, please call us at 719-357-6601.