With a reverse mortgage loan (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lender pays out money determined by your home equity amount; you receive a one-time amount, a payment every month or a line of credit. The borrowed money doesn't have to be repaid until the borrower sells his residence, moves out, or passes away. After you sell your property or you no longer use it as your main residence, you (or your estate) must pay back the lending institution for the cash you got from your reverse mortgage as well as interest and other finance charges.
Most reverse mortgages require you be at least 62 years of age, have a low or zero balance in a mortgage and maintain the property as your principal living place.
Homeowners who live on a limited income and need additional money find reverse mortgages advantageous for their circumstance. Interest rates may be fixed or adjustable while the money is nontaxable and doesn't adversely affect Social Security or Medicare benefits. The house will never be at risk of being taken away by the lending institution or sold against your will if you live past the loan term - even if the current property value dips under the loan balance. If you would like to find out more about reverse mortgages, please contact us at 720-598-8300.
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