In a reverse mortgage (also 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. The lending institution gives you money determined by your home equity amount; you receive a one-time amount, a monthly payment or a line of credit. Paying back your loan isn't necessary until the borrower puts his home up for sale, moves (such as to a retirement community) or dies. After your house sells or is no longer used as your primary residence, you (or your estate) have to repay the lending institution for the money you obtained from your reverse mortgage in addition to interest and other fees.
The conditions of a reverse mortgage normally include being sixty-two or older, maintaining your house as your primary living place, and holding a small balance on your mortgage or owning your home outright.
Reverse mortgages can be advantageous for retired homeowners or those who are no longer bringing home a paycheck and need to add to their fixed income. Social Security and Medicare benefits won't be affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed rates. Your home is never at risk of being taken away from you by the lending institution or put up for sale without your consent if you outlive the loan term - even if the property value goes under the loan balance. Contact us at 949-421-1000 if you would like to explore the advantages of reverse mortgages.