California Reverse Mortgage Benefits
A lot of seniors, starting at the age of 62, are looking for another form of income. Why not receive a reversed line of credit where you can pull from your house any time you please? This win-win allows seniors to stay in the homes that they have loved to live in and made beautiful memories in, and still tap in to its equity. Most seniors are most optimistic to this decision due to the fact that they have not found the right company that suits them best. The key to finding the right company involves no sales pitches and absolutely no hassling. The key in this process for companies to gain clients are to listen to what their needs are and accommodate to them accordingly in the best way they can.
How does it work?
Reverse mortgages in California are a great way for seniors, over the age of 61, to dip into the equity of their home without having to pay monthly mortgage payments or tax that is owed on the proceeds. Another condition to apply for a reverse mortgage in California is that you have to have the property as your primary home and that you are required to live at the property full time. One of the last, yet most common rule to make people unqualified is if they have any delinquent federal debts.
The most important thing that people need to remember when applying for a reverse mortgage in California is that it is a loan that eventually needs to be paid back. If you decide to sell the home or become deceased, the loan will be passed on the heir and it will be their responsibility to take care of it. Any equity beyond the amount owed will also be funded to the heir.
How much money will I get regarding a loan?
Because the determinate scale is based on life expectancy, those who are older are allowed to take more out due to the less time they have to live. These options are given so that there is an alternative, safer route that a home equity line of credit or a personal loan. Both of those options have very strict regulations and extremely high interest rates.
Costs of a Reverse Mortgage
Although this is a very beneficial program, there are very high financing costs. The expected amount that most loan servicers will expect the borrower to pay is usually around 6 percent of the total home’s appraised value. Most of these fees are able to be rolled over into the loan.
The FHA does require you to have mandatory financial counseling to inform you on the benefits that are occurring in this program.
When should they be used?
Baby boomers are now the biggest target market that California Reverse Mortgages are serving. Because most of their income is reliant on their checks from Social Security and they contain usually less than $25,000 in savings, uncertainty and imbalance is something that they encounter recurrently. There comes a problem when “big-spenders” take out this loan because it may just add to their problem that previously existed. As time goes on, you are ultimately decreasing your home’s equity and people need to prepare for if their home will be left behind.
For more information about a Reverse Mortgage in CA – contact Senior Advantage Association at (866) 620-0800.