Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to use their equity without having to sell their home. The lender gives you money determined by the equity you've accrued in your home; you get a lump sum, a payment each month or a line of credit. Paying back your loan isn't necessary until the time the borrower puts his home up for sale, moves (such as to a retirement community) or dies. You or representative of your estate has to pay back the reverse mortgage amount, interest accrued, and finance charges when your house is sold, or you can no longer use it as your primary residence.
The conditions of a reverse mortgage normally include being 62 or older, maintaining your home as your main residence, and holding a low balance on your mortgage or owning your home outright.
Reverse mortgages can be helpful for retired homeowners or those who are no longer bringing home a paycheck and have a need to supplement their limited income. Social Security and Medicare benefits are not affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed rates. Your lending institution is not able to take the property away if you outlive your loan nor will you be made to sell your residence to pay off your loan amount even if the loan balance grows to exceed current property value. If you would like to learn more about reverse mortgages, please call us at 720-598-8300.
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