With a reverse mortgage loan (also referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without selling their homes. The lender pays out money determined by the equity you've accrued in your home; you get a one-time amount, a payment each month or a line of credit. Paying back your loan is not required until when the borrower sells the property, moves (such as to a retirement community) or passes away. At the time you sell your home or you no longer use it as your main residence, you (or your estate) are obligated to pay back the lending institution for the funds you received from your reverse mortgage in addition to interest and other fees.
Typically, reverse mortgages are appropriate for homeowners who are at least 62 years old, have a low or zero balance in a mortgage and use the home as your principal residence.
Homeowners who live on a limited income and need additional funds find reverse mortgages ideal for their situation. Interest rates can be fixed or adjustable and the money is nontaxable and doesn't interfere with Medicare or Social Security benefits. Your lending institution isn't able to take away your house if you live past the loan term nor can you be made to sell your residence to pay off your loan amount even if the balance is determined to exceed property value. Call us at (773) 774-9040 Ext 121 if you'd like to explore the advantages of reverse mortgages.