Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to tap into equity without the necessity of selling their home. The lender pays out funds based on the equity you've accrued in your home; you receive a one-time amount, a payment every month or a line of credit. Repayment is not necessary until the time the borrower sells the home, moves (such as to a retirement community) or dies. You or your estate representative must repay the reverse mortgage funds, interest accrued, and other finance fees when your home is sold, or you can no longer call it your primary residence.
Usually, reverse mortgages are appropriate for homeowners who are at least 62 years of age, have a low or zero balance owed against your home and use the house as your principal residence.
Many homeowners who are on a limited income and find themselves needing additional funds find reverse mortgages advantageous for their situation. Social Security and Medicare benefits aren't affected; and the money is nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. Your home will never be in danger of being taken away by the lender or put up for sale without your consent if you live longer than your loan term - even if the property value creeps under the loan balance. If you would like to find out more about reverse mortgages, please call us at 205-941-1484.
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