In a reverse mortgage (also called a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without having to sell their homes. The lender pays you money determined by the equity you've built-up in your home; you get a lump sum, a payment each month or a line of credit. Repayment isn't required until the homeowner puts his home up for sale, moves (such as into a care facility) or passes away. When you sell your home or is no longer used as your primary residence, you (or your estate) have to pay back the lending institution for the money you obtained from the reverse mortgage in addition to interest among other fees.
Typically, reverse mortgages are appropriate for homeowners who are at least 62 years old, have a low or zero balance in a mortgage and use the home as your principal residence.
Reverse mortgages can be appropriate for retired homeowners or those who are no longer working and have a need to supplement their fixed income. Social Security and Medicare benefits aren't affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed rates. Your home will never be in danger 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 property value goes under the balance of the loan. Contact us at (818)645-7035 if you'd like to explore the benefits of reverse mortgages.
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