In a reverse mortgage (sometimes referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. The lending institution gives you funds determined by your home equity amount; you get a one-time amount, a payment each month or a line of credit. The loan does not have to be paid back until the homeowner sells the residence, moves away, or passes away. After you sell your property or you no longer use it as your main residence, you (or your estate) have to pay back the lender for the cash you obtained from the reverse mortgage in addition to interest and other fees.
Most reverse mortgages are available for homeowners who are at least 62 years old, have a low or zero balance in a mortgage and maintain the home as your principal living place.
Homeowners who live on a fixed income and find themselves needing additional money find reverse mortgages ideal for their situation. Social Security and Medicare benefits are not affected; and the funds are not taxable. Reverse Mortgages may have adjustable or fixed interest rates. Your home can never be at risk of being taken away by the lending institution or put up for sale against your will if you outlive the loan term - even if the current property value dips under the balance of the loan. If you'd like to find out more about reverse mortgages, feel free to call us at (478) 746-2063.
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