California Reverse Mortgages—Making the Right Choice

In California reverse mortgages are great options for older individuals to take advantage of the equity in their home. Basically, a reverse mortgage is available to individuals 62 and older who own their home and have a substantial amount of equity. There are many benefits to California reverse mortgages and can really be a lifesaver for older individuals who are retired and do not have a lot of extra cash but do have a significant amount of equity. The reverse mortgage was designed for this type of person.

Of course, if you are considering a California reverse mortgage you will need to take several things into consideration. Fist of all, is a reverse mortgage the best option for you? You will need to consider the following facts about a California reverse mortgage and compare it to your personal situation before you will be able to make the best choice regarding a reverse mortgage.

What is a Reverse Mortgage?
First of all a reverse mortgage is a mortgage on the equity in your home where the lender pays you! That is right, you will receive a loan amount based on the equity in your home and then the lender will either pay you a lump sum, give you a line of credit, or else make monthly payments to you for life. This sounds great to many individuals, but it is not the best option for all individuals.

Qualifying for a Reverse Mortgage
As briefly discussed a reverse mortgage is not available for everyone. In fact, a reverse mortgage is only available for those individuals 62 and above. Also, another requirement is that the individual own their home and have equity in their home. You will qualify for a small reverse mortgage or a large one depending on how much equity is in your home. A great thing to know is that no matter how much your loan is it will never be more than the value of your home.

Once you qualify for a reverse mortgage, and this is quite easy if you meet the requirements, then you will quickly receive your money.

Receiving the Money
One question a lot of individuals have about a California reverse mortgage is whether or not there are limitations on how they spend the money. The answer is that there are no regulations whatsoever. You can use the money from your reverse mortgage for whatever you need or want to. Some individuals apply for a reverse mortgage because they need the money to live while others simply want to take a vacation of a lifetime. Still others need to pay off their taxes or want to pay off their first mortgage. And some folks simply want to fund their retirement so they are not worried about income. Again, if you qualify for a California reverse mortgage you can spend the money on whatever need or want you have.

Your House Is Still Your House
With a California reverse mortgage you are not giving up the title or deed to your house. You are simply taking out a loan on your equity that will be paid back in one of several ways. You may pay back the loan when you cease to live in your home permanently. Or, if you decide to sell your home then you must pay back the reverse mortgage. Yet another option is to simply wait until you die and allow the sale of your house to pay back the mortgage and the rest, if there is any, will go to your estate.

Making Your Decision
Obviously there are many benefits to a reverse mortgage. You just need to evaluate your personal situation to see if the benefits are beneficial to you. If they aren’t then a California reverse mortgage is not your best option. If they are, then you should contact your financial institution to check on the reverse mortgage options available to you.