With a reverse mortgage loan (sometimes 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 you money determined by your home equity amount; you get a one-time amount, a monthly payment or a line of credit. The borrowed money does not have to be repaid until the homeowner sells his residence, moves away, or passes away. When you sell your home or is no longer used as your primary residence, you (or your estate) must pay back the lending institution for the funds you obtained from your reverse mortgage in addition to interest and other fees.
The requirements of a reverse mortgage loan usually include being sixty-two or older, maintaining your property as your main residence, and having a small remaining mortgage balance or having paid it off.
Reverse mortgages can be helpful for retired homeowners or those who are no longer working but have a need to supplement their fixed income. Social Security and Medicare benefits can not be affected; and the money is not taxable. Reverse Mortgages may have adjustable or fixed interest rates. The lending institution can't take away your property if you live past the loan term nor can you be obligated to sell your home to pay off your loan even if the loan balance is determined to exceed current property value. If you would like to learn more about reverse mortgages, please call us at (808) 935-0678.
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