Reverse mortgages (also referred to as "home equity conversion loans") enable older homeowners to tap into home equity without selling their home. Deciding how you'd prefer to be paid: by a monthly payment amount, a line of credit, or a one-time payment, you can take out a loan based on your equity. The loan does not have to be paid back until the homeowner sells the residence, moves away, or passes away. When you sell your home or you no longer use it as your main residence, you (or your estate) are obligated to repay the lender for the funds you received from the reverse mortgage in addition to interest and other fees.
The requirements of a reverse mortgage typically are being 62 or older, maintaining your home as your main residence, and having a small balance on your mortgage or owning your home outright.
Homeowners who live on a fixed income and have a need for additional money find reverse mortgages advantageous for their circumstance. Interest rates can be fixed or adjustable and the money is nontaxable and does not affect Medicare or Social Security benefits. The lending institution will not take away your residence if you live past the loan term nor will you be forced to sell your home to pay off the loan even if the balance is determined to exceed property value. If you would like to find out more about reverse mortgages, please call us at 801.999.0493.
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