A reverse mortgage is a loan option that allows you to access some of your home equity. If you’re 62 years of age or older, you could qualify for this loan type. Here’s how you can get a reverse mortgage in California.
What is a Reverse Mortgage?
With a traditional mortgage, the homeowner uses their income to pay down their debt. And as you could guess… a reverse mortgage is just the opposite. With this mortgage the loan balance grows over time because the homeowner is receiving equity rather than making monthly payments. It uses the home’s equity as collateral. The amount of money you can receive is determined by several factors such as your age, the home’s value, and the maximum lending limit.
Why Choose a Reverse Mortgage?
This loan type is commonly used to pay for home renovations, medical, and daily living expenses. Homeowners who have an existing mortgage often use the reverse mortgage loan to pay off their remaining debt and eliminate monthly loan payments. If you don’t plan to move and can afford the cost of maintaining your home, you could benefit hugely from a reverse mortgage loan.
How Do You Get a Reverse Mortgage?
To be eligible for a reverse mortgage loan in California, the youngest homeowner will need to be at least 62 years of age. Borrowers must also meet financial eligibility criteria as established by HUD. But good news, most single-family homes are eligible. You can receive the cash from the loan through a line of credit, a lump sum, or monthly payments.
Where Can You Get a Reverse Mortgage?
To get a reverse mortgage loan, be on the lookout for a reverse mortgage lender. Often times banks and credit unions who offer conventional loans don’t offer reverse mortgages. Both Wells Fargo and Bank of America pulled out of the reverse mortgage market in 2011. To get started with this loan and to access your home equity, your best bet is a local lending agency.
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