With a reverse mortgage (also called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. The lender gives 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 paid back until the homeowner sells his home, moves out, or dies. You or representative of your estate must repay the reverse mortgage loan, interest , and other finance fees at the time your home is sold, or you can no longer use it as your primary residence.
Usually, reverse mortgages are available for homeowners at least 62 years of age, have a low or zero balance owed against your home and maintain the house as your main residence.
Homeowners who are on a limited income and need additional funds find reverse mortgages helpful for their situation. Social Security and Medicare benefits are not affected; and the funds are not taxable. Reverse Mortgages can have adjustable or fixed interest rates. The lending institution is not able to take the property away if you outlive your loan nor can you be obligated to sell your residence to repay your loan even if the loan balance grows to exceed property value. Contact us at 760-547-2080 if you want to explore the advantages of reverse mortgages.