In a reverse mortgage loan (also called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. The lending institution pays out funds based on your home equity amount; you receive a lump sum, a payment every month or a line of credit. The loan does not have to be repaid until the borrower sells his residence, moves away, or passes away. You or your estate representative is obligated to repay the reverse mortgage funds, interest , and other finance fees when your house is sold, or you are no longer living in it.
The conditions of a reverse mortgage usually include being 62 or older, using the house as your main residence, and having a low remaining mortgage balance or having paid it off.
Many homeowners who are on a limited income and need additional funds find reverse mortgages helpful for their situation. Interest rates may be fixed or adjustable while the money is nontaxable and doesn't affect Social Security or Medicare benefits. Your lending institution isn't able to take away your residence if you outlive your loan nor can you be required to sell your residence to repay the loan amount even if the loan balance grows to exceed current property value. Contact us at 504-866-5626 to discuss your reverse mortgage options.
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