Reverse mortgages (also called "home equity conversion loans") enable older homeowners to use their home equity without having to sell their home. Deciding how you would prefer to to receive your funds: by a monthly amount, a line of credit, or a one-time payment, you may get a loan amount determined by your home equity. Repayment isn't required until when the borrower sells the property, moves (such as to a retirement community) or dies. At the time your house sells or you no longer use it as your primary residence, you (or your estate) must pay back the lending institution for the money you obtained from the reverse mortgage plus interest among other finance charges.
Generally, reverse mortgages are appropriate for homeowners who are at least sixty-two years old, have a small or zero balance in a mortgage and use the property as your main living place.
Reverse mortgages are helpful for homeowners who are retired or no longer working and must supplement their fixed income. Interest rates may be fixed or adjustable and the money is nontaxable and does not interfere with Social Security or Medicare benefits. The lending institution is not able to take the property away if you outlive your loan nor may you be obligated to sell your home to pay off your loan even if the loan balance grows to exceed property value. Contact us at (808) 935-0678 if you want to explore the benefits of reverse mortgages.
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