With a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without having to sell their homes. Deciding how you'd prefer to be paid: by a monthly amount, a line of credit, or a one-time payment, you can get a loan amount determined by your home equity. Paying back your loan isn't necessary until when the homeowner sells the property, moves (such as into a retirement community) or dies. At the time you sell your home or is no longer used as your primary residence, you (or your estate) must repay the lending institution for the funds you received from the reverse mortgage as well as interest and other fees.
Most reverse mortgages are offered to homeowners at least 62 years old, have a small or zero balance in a mortgage and maintain the house as your principal residence.
Many homeowners who are on a fixed income and find themselves needing additional money find reverse mortgages ideal for their situation. Interest rates can be fixed or adjustable and the funds are nontaxable and do not interfere with Medicare or Social Security benefits. The home can never be in danger of being taken away by the lending institution or sold against your will if you outlive the loan term - even if the current property value goes below the balance of the loan. If you'd like to learn more about reverse mortgages, please contact us at 720-598-8300.
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