What Is a Reversed Mortgage?

The reverse home loans allows elderly home owners to access the equity in their homes without having to actually sell it, these loans are also commonly called equity conversion loans. When you have a reversed mortgage the lender will pay you money that is based on the equity you have in your home.

You can receive either a one time payment, a line of credit or a monthly payment. You do not have to repay the loan until after the property is sold, the borrower dies or moves into a nursing home or retirement community.

When you have your mortgage reversed and no longer use your home as your main residence either you or your estate must repay the lender the money you received from the reversed mortgage plus the interest and other fees that maybe charged.

In most cases the borrowers must be at least 62 years old and have a very low or zero balance on their current loan. The property must also be maintained and kept in good condition.

Reversed home loans are great for retired home owners who want to increase their retirement incomes without having to go back to work. The loans interest rate can either be a stable fixed rate or a variable rate. The income you receive from a reverse mortgage is non taxable and will not cause any problems with social security payments.

You are also protected from the lender seizing your home if you outlive the loan. You can also not be forced to sell your property to pay off the loan even if the loan balances goes higher then the property value.

If you have any questions about reversed mortgages please feel free to contact one of our friendly and experienced mortgage professionals at (414)-771-1200