With a reverse mortgage (also called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. Deciding how you would prefer to be paid: by a monthly payment amount, a line of credit, or a one-time payment, you can receive a loan based on your home equity. Paying back your loan is not required until the time the homeowner sells the property, moves (such as into a retirement community) or passes away. After you sell your property or is no longer used as your main residence, you (or your estate) have to pay back the lender for the funds you got from the reverse mortgage as well as interest and other finance charges.
Most reverse mortgages are appropriate for homeowners who are at least sixty-two years old, have a small or zero balance owed against the home and maintain the house as your principal residence.
Reverse mortgages can be great for retired homeowners or those who are no longer working but have a need to add to their income. Social Security and Medicare benefits aren't affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed interest rates. Your lender can't take away your home if you live past the loan term nor can you be obligated to sell your home to pay off the loan amount even when the balance grows to exceed current property value. If you'd like to find out more about reverse mortgages, please call us at 248-644-1200.
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