In a reverse mortgage (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. Choosing between a monthly amount, a line of credit, or a one-time payment, you may take out a loan amount determined by your equity. The loan does not have to be repaid until the borrower sells his residence, moves out, or passes away. You or your estate representative is obligated to pay back the reverse mortgage amount, interest accrued, and other finance fees at the time your property is sold, or you are no longer living in it.
The conditions of a reverse mortgage loan typically include being 62 or older, maintaining your house as your main living place, and holding a small balance on your mortgage or owning your home outright.
Reverse mortgages can be advantageous for homeowners who are retired or no longer working but must add to their income. Interest rates may be fixed or adjustable and the funds are nontaxable and do not affect Medicare or Social Security benefits. The residence is never in danger of being taken away by the lending institution or sold without your consent if you live longer than your loan term - even if the property value creeps under the balance of the loan. If you'd like to learn more about reverse mortgages, feel free to call us at (773) 774-9040 Ext 121.
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