With a reverse mortgage (also called a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without selling their homes. Choosing between a monthly payment, a line of credit, or a one-time payment, you may receive a loan based on your equity. The borrowed money doesn't have to be paid back until the homeowner sells the residence, moves out, or passes away. When you sell your home or you no longer use it as your main residence, you (or your estate) have to repay the lending institution for the funds you obtained from the reverse mortgage in addition to interest among other fees.
The requirements of a reverse mortgage generally include being sixty-two or older, maintaining your home as your primary living place, and holding a small remaining mortgage balance or owning your home outright.
Reverse mortgages can be advantageous for retired homeowners or those who are no longer working and have a need to supplement their income. Rates of interest can be fixed or adjustable and the money is nontaxable and doesn't adversely affect Medicare or Social Security benefits. Your house is never in danger of being taken away from you by the lender or sold without your consent if you outlive the loan term - even if the current property value creeps under the loan balance. Contact us at (773) 774-9040 Ext 121 to explore your reverse mortgage options.