With a reverse mortgage homeowners of a certain age may use home equity for anything they need without selling their homes. The lender gives you funds based on your home equity amount; you get a lump sum, a payment each month or a line of credit. The loan does not have to be repaid until the borrower sells the residence, moves out, or passes away. At the time you sell your home or you no longer use it as your main residence, you (or your estate) must pay back the lender for the cash you obtained from your reverse mortgage as well as interest and other finance charges.
Who is Eligible?
The conditions of a reverse mortgage loan usually are being sixty-two or older, maintaining the property as your primary residence, and holding a low remaining mortgage balance or owning your home outright.
Reverse mortgages can be appropriate for homeowners who are retired or no longer bringing home a paycheck but need to add to their income. Interest rates can be fixed or adjustable while the funds are nontaxable and do not interfere with Social Security or Medicare benefits. Your lending institution cannot take the property away if you live past the loan term nor will you be required to sell your residence to repay your loan amount even if the balance grows to exceed current property value.