Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to tap into built-up home equity without having to sell their home. The lending institution gives you funds determined by your home equity amount; you receive a lump sum, a payment every month or a line of credit. The loan doesn't have to be repaid until the borrower sells the residence, moves away, or passes away. You or representative of your estate is obligated to repay the reverse mortgage loan, interest accrued, and other finance fees at the time your property is sold, or you can no longer call it your primary residence.
Generally, reverse mortgages require you be at least 62 years of age, have a low or zero balance in a mortgage and use the house as your principal residence.
Many homeowners who are on a fixed income and find themselves needing additional money find reverse mortgages helpful for their situation. Social Security and Medicare benefits will not be affected; and the funds are nontaxable. Reverse Mortgages may have adjustable or fixed rates. The lending institution is not able to take the property away if you live past the loan term nor may you be obligated to sell your home to pay off your loan amount even if the balance grows to exceed property value. If you would like to learn more about reverse mortgages, feel free to contact us at 720-598-8300.
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