Reverse mortgages (also called "home equity conversion loans") give older homeowners the ability to use their built-up equity without selling their home. The lender pays you money determined by your home equity amount; you get a lump sum, a payment each month or a line of credit. The borrowed money does not have to be repaid until the homeowner sells his home, moves out, or dies. At the time you sell your home or you no longer use it as your main residence, you (or your estate) must repay the lender for the cash you received from your reverse mortgage in addition to interest among other fees.
Generally, reverse mortgages are available for homeowners who are at least sixty-two years of age, have a low or zero balance in a mortgage and maintain the house as your main residence.
Reverse mortgages can be ideal for homeowners who are retired or no longer working but need to supplement their income. Interest rates can be fixed or adjustable while the money is nontaxable and does not affect Social Security or Medicare benefits. The house can never be at risk of being taken away by the lending institution or sold against your will if you live longer than the loan term - even if the current property value dips below the balance of the loan. Call us at 248-644-1200 if you would like to explore the benefits of reverse mortgages.
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