In a reverse mortgage (also called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. Deciding how you'd prefer to be paid: by a monthly amount, a line of credit, or a one-time payment, you may receive a loan based on your home equity. Paying back your loan isn't necessary until the homeowner puts his home up for sale, moves (such as to a care facility) or dies. When your house sells or is no longer used as your main residence, you (or your estate) are required to repay the lending institution for the cash you obtained from the reverse mortgage in addition to interest among other finance charges.
Most reverse mortgages are offered to homeowners at least 62 years of age, have a low or zero balance in a mortgage and maintain the home as your principal living place.
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 while the money is nontaxable and doesn't interfere with Medicare or Social Security benefits. The residence is never in danger of being taken away by the lending institution or put up for sale against your will if you outlive your loan term - even if the property value creeps below the loan balance. Call us at 949-421-1000 if you want to explore the advantages of reverse mortgages.