Reverse Mortgages:the Facts

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In a reverse mortgage (sometimes referred to as a a home equity conversion loan), borrowers of a certain age may use home equity for living expenses without having to sell their homes. The lending institution pays you money based on your home equity amount; you get a one-time amount, a payment each month or a line of credit. Paying back your loan isn't required until the borrower sells the property, moves (such as to a retirement community) or dies. At the time your home has been sold or you no longer use it as your primary residence, you (or your estate) have to pay back the lending institution for the cash you obtained from the reverse mortgage as well as interest and other fees.

Are you Eligible?

Typically, reverse mortgages are appropriate for homeowners who are at least 62 years old, have a low or zero balance in a mortgage and use the home as your main residence.

Many homeowners who live on a limited income and need additional funds find reverse mortgages helpful for their situation. Rates of interest may be fixed or adjustable and the money is nontaxable and doesn't affect Social Security or Medicare benefits. The residence is never in danger of being taken away from you by the lender or sold against your will if you outlive the loan term - even if the property value dips below the loan balance. Call us at 303-471-4445 if you'd like to explore the benefits of reverse mortgages.

At Colorado Home Mortgages, Inc., we answer questions about reverse mortgages every day. Call us at 303-471-4445.