Reverse mortgages (also referred to as "home equity conversion loans") enable older homeowners to benefit from their equity without selling their home. Deciding how you prefer to be paid: by a monthly amount, a line of credit, or a lump sum, you can take out a loan based on your equity. The loan doesn't have to be paid back until the borrower sells the home, moves away, or dies. When your house sells or is no longer used as your primary residence, you (or your estate) are obligated to pay back the lending institution for the money you obtained from the reverse mortgage in addition to interest and other fees.
The conditions of a reverse mortgage often include being 62 or older, maintaining your house as your primary living place, and holding a low remaining mortgage balance or having paid it off.
Many homeowners who are on a limited income and need additional funds find reverse mortgages helpful for their circumstance. Rates of interest can be fixed or adjustable and the funds are nontaxable and do not adversely affect Social Security or Medicare benefits. The home will never be at risk 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 creeps under the loan balance. If you'd like to learn more about reverse mortgages, please call us at 248-644-1200.
Do you have a question regarding a mortgage program?