With a reverse mortgage (sometimes 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. Choosing between a monthly amount, a line of credit, or a one-time payment, you may receive a loan amount determined by your home equity. The borrowed money does not have to be paid back until the borrower sells the residence, moves out, or passes away. After your home sells or is no longer used as your primary residence, you (or your estate) are required to repay the lender for the cash you received from the reverse mortgage plus interest among other finance charges.
Typically, reverse mortgages require you be at least 62 years old, have a low or zero balance in a mortgage and maintain the home as your principal living place.
Many homeowners who live on a limited income and find themselves needing additional funds find reverse mortgages advantageous for their circumstance. Rates of interest can be fixed or adjustable while the funds are nontaxable and don't interfere with Medicare or Social Security benefits. Your house is never in danger of being taken away from you by the lender or put up for sale without your consent if you live longer than your loan term - even if the current property value goes below the loan balance. If you would like to find out more about reverse mortgages, please contact us at 410.695.3547.
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