Reverse mortgages (sometimes called "home equity conversion loans") give older homeowners the ability to tap into built-up equity without the necessity of selling their home. The lender gives you funds based on your home equity amount; you get a lump sum, a payment each month or a line of credit. The loan does not have to be repaid until the homeowner sells the residence, moves out, or dies. At the time your house has been sold or is no longer used as your primary residence, you (or your estate) have to repay the lender for the cash you obtained from your reverse mortgage plus interest among other fees.
Generally, reverse mortgages are offered to homeowners who are at least 62 years old, have a low or zero balance owed against the home and maintain the home as your main residence.
Reverse mortgages can be great for homeowners who are retired or no longer bringing home a paycheck and must add to their income. Rates of interest may be fixed or adjustable while the funds are nontaxable and don't affect Medicare or Social Security benefits. The residence 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 the loan term - even if the property value goes below the balance of the loan. Contact us at 949-421-1000 to look into your reverse mortgage options.