Is a Reverse Mortgage Loan for You?

Reverse mortgages aren't the same loans they once were.  Product changes in recent years have given new life to Home Equity Conversion Mortgages, reshaping them into practical retirement planning solutions designed to meet more sophisticated needs than their previous "loan of last resort" reputation would allow.  Reverse mortgages (sometimes called "home equity conversion loans") enable older homeowners to tap into equity without selling their home. The lending institution pays out funds determined by the value of your property, equity, age of the youngest borrower, and current interest rates.  You can get a one-time amount, a payment every month, a line of credit, or a combination of the three . Repayment isn't necessary until after the homeowner sells their home, moves (such as to a care facility) or dies. At the time you sell your home or you no longer use it as your main residence, you (or your estate) have to repay the lender for the money you got from the reverse mortgage plus interest and other fees.  The borrower must also maintain homeowner's insurance, property taxes, and home maintenance to prevent the loan from becoming due and payable.

Who is Able to Participate?

The conditions of a reverse mortgage loan include being sixty-two or older, using the home as your primary living place, and having a low remaining mortgage balance or owning your home outright.

Reverse mortgages are helpful for homeowners who are retired or no longer bringing home a paycheck and need to supplement their income and the money is not taxable. Reverse Mortgages can have adjustable or fixed interest rates.  The lending institution is not able to take the property away if you outlive your loan so long as you comply with the loan terms nor can you be required to sell your residence to pay off your loan even when the balance grows to exceed property value. If you would like to learn more about reverse mortgages, please call us at (951)840-4188.