In a reverse mortgage (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lender gives you money determined by your home equity amount; you receive a one-time amount, a monthly payment or a line of credit. The borrowed money does not have to be paid back until the borrower sells his residence, moves away, or dies. You or representative of your estate has to repay the reverse mortgage loan, interest , and finance charges when your house is sold, or you can no longer call it your primary residence.
Generally, reverse mortgages require you be at least 62 years of age, have a small or zero balance owed against the home and maintain the home as your principal residence.
Reverse mortgages are appropriate for homeowners who are retired or no longer bringing home a paycheck and need to supplement their limited income. Rates of interest can be fixed or adjustable and the money is nontaxable and doesn't affect Medicare or Social Security benefits. The lender will not take away your residence if you live past the loan term nor may you be made to sell your residence to repay the loan amount even if the loan balance is determined to exceed current property value. Contact us at (773) 774-9040 Ext 121 if you'd like to explore the advantages of reverse mortgages.
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