With a reverse mortgage loan (sometimes referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. The lender pays you funds based on your home equity amount; you receive a one-time amount, a payment each month or a line of credit. Paying back your loan isn't required until when the homeowner puts his home up for sale, moves (such as into a care facility) or passes away. After you sell your property or you no longer use it as your main residence, you (or your estate) are required to pay back the lender for the cash you obtained from your reverse mortgage plus interest and other fees.
The conditions of a reverse mortgage generally include being 62 or older, maintaining your property as your main residence, and having a low remaining mortgage balance or owning your home outright.
Homeowners who are on a fixed income and need additional money find reverse mortgages ideal for their situation. Interest rates can be fixed or adjustable and the funds are nontaxable and don't interfere with Social Security or Medicare benefits. Your home can never be at risk of being taken away from you by the lending institution or put up for sale without your consent if you live past your loan term - even if the property value creeps under the balance of the loan. Call us at (773) 774-9040 Ext 121 if you'd like to explore the benefits of reverse mortgages.
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