In a reverse mortgage loan (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without having to sell their homes. The lender gives you funds based on the equity you've built-up in your home; you get a lump sum, a payment each month or a line of credit. Paying back your loan isn't required until when the homeowner puts his home up for sale, moves (such as into a care facility) or dies. When your house sells or is no longer used as your main residence, you (or your estate) have to pay back the lending institution for the cash you received from your reverse mortgage plus interest and other fees.
The requirements of a reverse mortgage loan typically include being 62 or older, using the home as your primary residence, and having a small balance on your mortgage or having paid it off.
Many homeowners who live on a fixed income and find themselves needing additional funds find reverse mortgages helpful for their circumstance. Rates of interest may be fixed or adjustable and the funds are nontaxable and don't adversely affect Medicare or Social Security benefits. The house is never at risk of being taken away by the lending institution or put up for sale against your will if you outlive the loan term - even if the property value dips under the loan balance. Call us at 248-644-1200 if you'd like to explore the advantages of reverse mortgages.
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