In a reverse mortgage loan (also referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without having to sell their homes. Choosing between a monthly payment, a line of credit, or a one-time payment, you can take out a loan amount determined by your equity. Repayment is not required until after the homeowner puts his home up for sale, moves (such as into a care facility) or dies. After you sell your home or you no longer use it as your main residence, you (or your estate) must repay the lending institution for the funds you received from the reverse mortgage plus interest among other finance charges.
The conditions of a reverse mortgage loan typically include being 62 or older, using the house as your main living place, and having a low remaining mortgage balance or owning your home outright.
Reverse mortgages can be advantageous for homeowners who are retired or no longer bringing home a paycheck but need to supplement their fixed income. Rates of interest can be fixed or adjustable and the funds are nontaxable and do not interfere with Medicare or Social Security benefits. The house is never at risk of being taken away from you by the lending institution or put up for sale against your will if you live longer than your loan term - even if the current property value goes under the loan balance. Call us at (816) 525-8000 & (81 if you'd like to explore the benefits of reverse mortgages.
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