In a reverse mortgage (sometimes called a home equity conversion loan), homeowners of a certain age may use home equity for living expenses without having to sell their homes. Choosing between a monthly payment amount, a line of credit, or a lump sum, you can get a loan amount determined by your equity. Repayment isn't necessary until after the homeowner sells the home, moves (such as to a retirement community) or dies. You or an estate representative is obligated to pay back the reverse mortgage funds, interest , and other finance charges after your home is sold, or you are no longer living in it.
Generally, reverse mortgages are offered to borrowers at least 62 years of age, have a small or zero balance in a mortgage and maintain the property as your principal residence.
Reverse mortgages are appropriate for homeowners who are retired or no longer bringing home a paycheck but must supplement their fixed income. Rates of interest can be fixed or adjustable while the money is nontaxable and doesn't interfere with Medicare or Social Security benefits. The house is never in danger of being taken away from you by the lender or sold against your will if you live longer than your loan term - even if the current property value creeps below the balance of the loan. If you would like to find out more about reverse mortgages, feel free to contact us at (760) 943-7200.
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