3 Top Questions Before;
Top 3 Questions Before You Sign California Reverse Mortgage Papers
You and your spouse are over the age of 62 and you own your own home. You've checked the landscape and decided that a California reverse mortgage is in your future. You've gone and spoken with a loan counselor and looked at your options and all the related costs. You're picking up the papers tomorrow with the signing date the day after.
Here are the Top 3 questions you should ask yourself before that day comes. No harm in looking over your situation one more time.
1. Do I really need the money from the California Reverse Mortgage?
A California reverse mortgage is a nice tax-free income stream but it's not free. It is a loan and you are assuming debt. Since the principal grows as time goes by, the amount of interest accruing grows as well, unlike other traditional "forward mortgages" loans that get smaller as you repay them. You should be getting a California reverse mortgage to spend the money, not to increase your savings. If you don't plan on spending the money, you shouldn't get a reverse mortgage.
2. OK, so I get my California Reverse Mortgage, but how long will I be around?
Talking about your mortality is kind of strange, but when you are discussing debt and death, you have to deal with this topic. You take on a California reverse mortgage to give you a stream of income that lasts for as long as you live, and the longer you live, the better the deal you are getting.
3. Do I want to leave an inheritance?
A California reverse mortgage uses your primary residence as collateral. For many Americans, the primary residence is also the largest single asset that gets left to the inheritors. If you take out a reverse mortgage and live for a long time, there may be nothing left for your heirs. If you pass away before you've used up the equity in your home, your heirs will sell the property, settle the debt, and keep what remains. They also have the opportunity to refinance the home if they desire, but that is another discussion and you won;t get to participate in that one.
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