Reverse Mortgages:the Facts

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With a reverse mortgage (sometimes called a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. Deciding how you prefer to be paid: by a monthly amount, a line of credit, or a one-time payment, you can take out a loan based on your equity. Paying back your loan is not necessary until the time the homeowner puts his home up for sale, moves (such as into a retirement community) or dies. After your house has been sold or you no longer use it as your main residence, you (or your estate) have to repay the lender for the funds you got from the reverse mortgage as well as interest and other fees.

Who is Eligible?

Usually, reverse mortgages require you be at least 62 years old, have a small or zero balance owed against your home and maintain the house as your principal residence.

Many homeowners who are on a fixed income and have a need for additional funds find reverse mortgages helpful for their situation. Rates of interest can be fixed or adjustable while the funds are nontaxable and do not interfere with Social Security or Medicare benefits. The house is never in danger of being taken away by the lender or put up for sale against your will if you live longer than the loan term - even if the property value dips below the balance of the loan. If you'd like to learn more about reverse mortgages, please call us at 310-379-5997.

Real Property Finance can walk you through the pitfalls of getting a reverse mortgage. Give us a call at 310-379-5997.

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