Reverse mortgages (also referred to as "home equity conversion loans") give older homeowners the ability to use their built-up home equity without having to sell their home. The lending institution pays you money determined by the equity you've accrued in your home; you receive a lump sum, a monthly payment or a line of credit. The borrowed money doesn't have to be paid back until the homeowner sells the residence, moves out, or passes away. At the time you sell your home or is no longer used as your main residence, you (or your estate) are required to pay back the lender for the cash you got from your reverse mortgage in addition to interest and other finance charges.
Most reverse mortgages are available for homeowners at least sixty-two years of age, have a low or zero balance in a mortgage and maintain the home as your principal residence.
Reverse mortgages are appropriate for retired homeowners or those who are no longer bringing home a paycheck and need to add to their income. Rates of interest can be fixed or adjustable and the money is nontaxable and does not affect Social Security or Medicare benefits. Your lender cannot take away your residence if you live past the loan term nor will you be required to sell your home to pay off the loan amount even when the loan balance is determined to exceed current property value. Call us at (415) 406-2330 to look into your reverse mortgage options.