Reverse mortgages (sometimes called "home equity conversion loans") give older homeowners the ability to benefit from their home equity without the necessity of selling their home. Choosing between a monthly payment, a line of credit, or a one-time payment, you may get a loan based on your equity. The borrowed money does not have to be repaid until the borrower sells his home, moves away, or passes away. When your house has been sold or you no longer use it as your main residence, you (or your estate) are required to pay back the lending institution for the funds you obtained from the reverse mortgage in addition to interest and other finance charges.
Typically, reverse mortgages require youto be at least 62 years old, have a low or zero balance in a mortgage and use the house as your main living place.
Homeowners who are on a fixed income and find themselves needing additional money find reverse mortgages advantageous for their circumstance. Rates of interest may be fixed or adjustable while the funds are nontaxable and don't interfere with Social Security or Medicare benefits. The residence can never be in danger of being taken away by the lender or put up for sale without your consent if you outlive your loan term - even if the current property value goes below the loan balance. If you'd like to learn more about reverse mortgages, feel free to contact us at 720-598-8300.
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