Reverse mortgages (also called "home equity conversion loans") give older homeowners the ability to use their home equity without having to sell their home. The lender gives you funds determined by your home equity amount; you receive a one-time amount, a monthly payment or a line of credit. The loan doesn't have to be paid back until the borrower sells his home, moves away, or dies. You or representative of your estate has to pay back the reverse mortgage loan, interest accrued, and finance charges when your property is sold, or you no longer live in it.
Typically, reverse mortgages require youto be at least 62 years of age, have a small or zero balance owed against your home and use the property as your principal residence.
Many homeowners who live on a limited income and find themselves needing additional money find reverse mortgages ideal for their situation. Social Security and Medicare benefits will not be affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed rates. The lender can't take the property away if you live past the loan term nor can you be forced to sell your residence to pay off the loan amount even if the loan balance grows to exceed current property value. If you would like to learn more about reverse mortgages, please contact us at 720-598-8300.
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