Reverse mortgages (sometimes referred to as "home equity conversion loans") enable older homeowners to use their home equity without having to sell their home. Choosing between a monthly amount, a line of credit, or a one-time payment, you can receive a loan based on your home equity. The loan doesn't have to be paid back until the homeowner sells the residence, moves away, or dies. When your home has been sold or you no longer use it as your primary residence, you (or your estate) must pay back the lending institution for the funds you received from your reverse mortgage in addition to interest and other fees.
The conditions of a reverse mortgage normally include being 62 or older, using the property as your main residence, and holding a low balance on your mortgage or owning your home outright.
Reverse mortgages are helpful for homeowners who are retired or no longer bringing home a paycheck and have a need to supplement their fixed income. Social Security and Medicare benefits can not be affected; and the funds are nontaxable. Reverse Mortgages can have adjustable or fixed interest rates. Your lender will not take away your residence if you live past the loan term nor will you be required to sell your home to repay your loan even when the balance is determined to exceed property value. If you'd like to learn more about reverse mortgages, feel free to call us at 720-598-8300.
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