Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to tap into built-up home equity without having to sell their home. The lending institution gives you funds determined by the equity you've accrued in your home; you receive a one-time amount, a monthly payment or a line of credit. The loan doesn't have to be repaid until the borrower sells his residence, moves out, or passes away. When you sell your property or is no longer used as your main residence, you (or your estate) are obligated to pay back the lending institution for the cash you got from your reverse mortgage plus interest and other finance charges.
The conditions of a reverse mortgage loan generally include being sixty-two or older, maintaining the home as your main residence, and holding a low balance on your mortgage or owning your home outright.
Many homeowners who live on a limited income and find themselves needing additional funds find reverse mortgages helpful for their situation. Interest rates may be fixed or adjustable while the funds are nontaxable and do not interfere with Medicare or Social Security benefits. Your lending institution will not take the property away if you outlive your loan nor will you be required to sell your residence to pay off the loan amount even if the loan balance grows to exceed current property value. Contact us at 949-421-1000 to look into your reverse mortgage options.