Reverse Mortgages:the Facts

With a reverse mortgage loan (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without selling their homes. The lender gives you money determined by the equity you've accrued in your home; you receive a one-time amount, a payment every month or a line of credit. Repayment isn't required until the homeowner sells the home, moves (such as into a retirement community) or dies. At the time you sell your property or you no longer use it as your main residence, you (or your estate) have to repay the lending institution for the funds you obtained from the reverse mortgage as well as interest among other finance charges.

Who can Participate?

The requirements of a reverse mortgage loan generally include being 62 or older, using the home as your primary living place, and holding a low remaining mortgage balance or having paid it off.

Many homeowners who live on a limited income and find themselves needing additional funds find reverse mortgages ideal for their situation. Social Security and Medicare benefits will not be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed rates. The lender can't take away your property if you live past the loan term nor will you be required to sell your home to repay the loan amount even if the loan balance is determined to exceed current property value. If you'd like to learn more about reverse mortgages, feel free to call us at (818) 920-3522.