Reverse mortgages (sometimes called "home equity conversion loans") enable older homeowners to use their built-up home equity without selling their home. The lending institution pays out money determined by the equity you've built-up in your home; you get a one-time amount, a payment every month or a line of credit. Paying back your loan is not required until the time the homeowner puts his home up for sale, moves (such as to a retirement community) or dies. You or representative of your estate is required to pay back the reverse mortgage loan, interest accrued, and other finance fees when your home is sold, or you are no longer living in it.
Generally, reverse mortgages require you be at least sixty-two years old, have a small or zero balance owed against the home and maintain the home as your main living place.
Homeowners who live on a limited income and find themselves needing additional funds find reverse mortgages ideal for their situation. Interest rates can be fixed or adjustable and the funds are nontaxable and don't affect Medicare or Social Security benefits. Your lending institution cannot take away your residence if you live past the loan term nor can you be required to sell your residence to pay off your loan even if the balance is determined to exceed current property value. Contact us at (401) 583-4150 if you want to explore the advantages of reverse mortgages.
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