California Reverse Mortgage Loan Basics
California Reverse Mortgage Basics
A loan against your home that requires no repayment for as long as you live there is called a reverse mortgage. Traditional home loans are also called “forward mortgages” so that's how these loans got their name.
To qualify for a “forward mortgage”, the lender checks your income to see what payments you can afford to make each month; this determines the size of the loan. With a California reverse mortgage, the monthly payments flow to you. How much you take in a month doesn't come into play when determining the size of the loan. The factors that do matter are the equity in the home (it has to be owned free and clear or nearly paid off) and your age. Your current income is a non-factor.
The most attractive feature of a California reverse mortgage is that you can stay in your home as long as you like. If you use the property as you primary residence, keep up with the maintenance, and pay all taxes due, you can remain in the property for as long as you like.
To qualify for a California reverse mortgage, you must be at least 62 years old and the property on which you wish to take a California reverse mortgage is used as your primary residence.
If you do qualify for a California reverse mortgage, you can take the money out in three different ways: a lump sum payment, monthly payments, or as a line of credit to be withdrawn whenever you choose. You can combine the ways of payment, such as taking out a set sum of money and then having the remainder be distributed as monthly payments.
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