Reverse mortgages (also called "home equity conversion loans") give older homeowners the ability to use their built-up home equity without having to sell their home. The lending institution gives you funds based on the equity you've accrued in your home; you receive a one-time amount, a monthly payment or a line of credit. Paying back your loan isn't necessary until the time the homeowner puts his home up for sale, moves (such as into a care facility) or dies. You or representative of your estate has to pay back the reverse mortgage amount, interest , and finance fees at the time your house is sold, or you are no longer living in it.
The requirements of a reverse mortgage loan normally are being 62 or older, maintaining the house as your primary living place, and having a small balance on your mortgage or having paid it off.
Reverse mortgages can be helpful for retired homeowners or those who are no longer working and have a need to supplement their income. Rates of interest can be fixed or adjustable while the funds are nontaxable and don't adversely affect Social Security or Medicare benefits. Your house is never in danger of being taken away from you by the lender or put up for sale without your consent if you live past your loan term - even if the current property value goes under the loan balance. If you'd like to find out more about reverse mortgages, please call us at 248-644-1200.
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