Reverse mortgages (sometimes referred to as "home equity conversion loans") give older homeowners the ability to tap into built-up equity without the necessity of selling their home. The lender gives you funds based on your home equity amount; you get a one-time amount, a payment each month or a line of credit. Repayment isn't necessary until the borrower sells the property, moves (such as to a care facility) or passes away. When you sell your property or is no longer used as your primary residence, you (or your estate) must repay the lender for the funds you received from your reverse mortgage plus interest among other finance charges.
The conditions of a reverse mortgage loan normally include being sixty-two or older, maintaining your property as your primary residence, and having a low balance on your mortgage or having paid it off.
Reverse mortgages are great for homeowners who are retired or no longer working and need to add to their fixed income. Social Security and Medicare benefits won't be affected; and the money is not taxable. Reverse Mortgages may have adjustable or fixed rates. Your lending institution cannot take away your home if you outlive your loan nor will you be forced to sell your home to pay off your loan amount even when the balance is determined to exceed property value.