In a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without selling their homes. Choosing between a monthly payment amount, a line of credit, or a lump sum, you may receive a loan based on your equity. Paying back your loan isn't required until when the borrower sells the property, moves (such as to a retirement community) or dies. You or an estate representative has to pay back the reverse mortgage loan, interest , and other finance charges after your property is sold, or you are no longer living in it.
Usually, reverse mortgages require youto be at least sixty-two years old, have a low or zero balance in a mortgage and maintain the home as your principal residence.
Reverse mortgages can be appropriate for homeowners who are retired or no longer bringing home a paycheck but have a need to add to their limited income. Rates of interest can be fixed or adjustable and the funds are nontaxable and do not interfere with Social Security or Medicare benefits. The residence can never be in danger of being taken away by the lender or sold against your will if you outlive the loan term - even if the property value dips 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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