Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to use their equity without the necessity of selling their home. The lender gives you funds based on the equity you've accrued in your home; you get a lump sum, a payment each month or a line of credit. Paying back your loan is not required until the time the borrower puts his home up for sale, moves (such as to a retirement community) or dies. You or representative of your estate is required to pay back the reverse mortgage amount, interest accrued, and other finance fees after your property is sold, or you are no longer living in it.
Most reverse mortgages require youto be at least 62 years of age, have a low or zero balance in a mortgage and use the house as your principal residence.
Reverse mortgages can be great for homeowners who are retired or no longer bringing home a paycheck and need to supplement their limited income. Interest rates may be fixed or adjustable and the funds are nontaxable and don't affect Social Security or Medicare benefits. The house will never be in danger of being taken away from you by the lender or put up for sale against your will if you live longer than your loan term - even if the property value dips under the balance of the loan. If you would like to learn more about reverse mortgages, feel free to contact us at 469-640-0400.
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