Reverse Mortgages:the Facts
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With a reverse mortgage loan (also called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. Choosing between a monthly payment amount, a line of credit, or a lump sum, you may take out a loan amount determined by your equity. Paying back your loan isn't required until after the homeowner puts his home up for sale, moves (such as into a retirement community) or dies. You or representative of your estate has to pay back the reverse mortgage loan, interest accrued, and other finance fees after your home is sold, or you are no longer living in it.
Are you Eligible?
The conditions of a reverse mortgage loan generally include being 62 or older, using the home as your primary living place, and having a low remaining mortgage balance or owning your home outright.
Reverse mortgages are helpful for homeowners who are retired or no longer working but need to supplement their limited income. Interest rates may be fixed or adjustable and the money is nontaxable and does not affect Medicare or Social Security benefits. The house is never at risk of being taken away by the lending institution or sold against your will if you live past your loan term - even if the property value dips below the balance of the loan. If you'd like to find out more about reverse mortgages, feel free to contact us at (408) 255-3978.
Real Estate Loan 4 U can walk you through the pitfalls of getting a reverse mortgage. Give us a call at (408) 255-3978.