With a reverse mortgage (sometimes referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for anything they need without selling their homes. The lender pays out funds based on the equity you've built-up in your home; you get a one-time amount, a payment every month or a line of credit. The borrowed money does not have to be repaid until the homeowner sells the home, moves away, or dies. After your house has been sold or you no longer use it as your main residence, you (or your estate) have to pay back the lender for the money you got from the reverse mortgage as well as interest and other fees.
The conditions of a reverse mortgage loan usually are being 62 or older, using the property as your primary residence, and having a low balance on your mortgage or having paid it off.
Reverse mortgages are great for retired homeowners or those who are no longer working but must add to their limited income. Interest rates may be fixed or adjustable and the money is nontaxable and does not affect Social Security or Medicare benefits. Your lending institution will not take the property away if you live past the loan term nor will you be made to sell your residence to pay off your loan amount even when the balance is determined to exceed property value. Call us at (504) 212-0704 to explore your reverse mortgage options.
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