Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to tap into equity without selling their home. Deciding how you would prefer to be paid: by a monthly amount, a line of credit, or a one-time payment, you can get a loan amount determined by your equity. Paying back your loan is not necessary until when the borrower sells the home, moves (such as to a care facility) or passes away. After you sell your home or you no longer use it as your primary residence, you (or your estate) must pay back the lender for the money you got from your reverse mortgage as well as interest and other finance charges.
The conditions of a reverse mortgage loan typically are being 62 or older, using the home as your main residence, and having a small remaining mortgage balance or owning your home outright.
Reverse mortgages are helpful for homeowners who are retired or no longer bringing home a paycheck but have a need to add to their limited income. Rates of interest can be fixed or adjustable while the funds are nontaxable and do not affect Social Security or Medicare benefits. The lender cannot take the property away if you live past the loan term nor can you be obligated to sell your residence to repay the loan even if the balance is determined to exceed current property value. Call us at (973) 601-2122 if you want to explore the benefits of reverse mortgages.
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