In a reverse mortgage (sometimes called 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 amount, a line of credit, or a lump sum, you can get a loan based on your home equity. The borrowed money doesn't have to be paid back until the homeowner sells his residence, moves away, or dies. You or an estate representative must repay the reverse mortgage loan, interest accrued, and finance fees when your home is sold, or you no longer live in it.
The conditions of a reverse mortgage usually are being 62 or older, using the house as your main residence, and holding a small remaining mortgage balance or having paid it off.
Many homeowners who live on a limited income and have a need for additional money find reverse mortgages advantageous for their circumstance. Interest rates may be fixed or adjustable while the funds are nontaxable and do not interfere with Social Security or Medicare benefits. Your lending institution cannot take away your residence if you live past the loan term nor can you be forced to sell your residence to pay off the loan amount even when the loan balance is determined to exceed property value. Call us at (973) 601-2122 if you'd like to explore the advantages of reverse mortgages.
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