With a reverse mortgage (sometimes referred to as a a home equity conversion loan), homeowners of a certain age may use home equity for anything they need without selling their homes. The lending institution gives you funds determined by the equity you’ve built-up in your home; you receive a lump sum, a monthly payment or a line of credit. The loan does not have to be repaid until the homeowner sells the residence, moves away, or dies. At the time you sell your home or you no longer use it as your primary residence, you (or your estate) are required to pay back the lending institution for the funds you got from your reverse mortgage in addition to interest among other fees.

Who is Able to Participate?

The requirements of a reverse mortgage typically include being sixty-two or older, using the house as your main living place, and holding a low balance on your mortgage or owning your home outright.

Many homeowners who are on a limited income and find themselves needing additional money find reverse mortgages ideal for their circumstances. Interest rates can be fixed or adjustable while the money is nontaxable and does not adversely affect Social Security or Medicare benefits. The lender cannot take the property away if you live past the loan term nor will you be forced to sell your residence to repay the loan amount even if the balance is determined to exceed property value. The loan does not have to be repaid until the homeowner sells the residence, moves away or dies. The homeowner is responsible for staying current on property taxes and insurance and keeping the home maintained.

If you would like to learn more about reverse mortgages, please contact us at (352) 665-1300.

At Hometown Mortgage Services LLC, we answer questions about Reverse Mortgages every day.

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This material is not from HUD or FHA and has not been approved by HUD or a government agency.


Searching for mortgage advice? We will be glad to help! Call Ron Starling (352) 665-1300.