In a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. Deciding how you prefer to to receive your funds: by a monthly payment, a line of credit, or a lump sum, you can take out a loan based on your home equity. Paying back your loan is not necessary until when the homeowner sells the property, moves (such as into a retirement community) or passes away. After your home sells or is no longer used as your main residence, you (or your estate) are required to repay the lending institution for the cash you got from the reverse mortgage in addition to interest among other finance charges.
Most reverse mortgages require you be at least 62 years of age, have a small or zero balance owed against the home and use the property as your principal living place.
Reverse mortgages can be ideal for retired homeowners or those who are no longer bringing home a paycheck and have a need to supplement their limited income. Rates of interest may be fixed or adjustable and the money is nontaxable and does not affect Social Security or Medicare benefits. Your residence is never at risk of being taken away from you by the lender or put up for sale against your will if you live past the loan term - even if the property value creeps below the loan balance. If you would like to learn more about reverse mortgages, please call us at 720-598-8300.
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