Reverse Mortgage Help
Can a California Reverse Mortgage help you?
There are three big advantages to having a California reverse mortgage:
The biggest advantage is that a homeowner can start to get a new revenue stream free from taxes. The income gained from a reverse mortgage is not considered “income” per se, since the “income” is really the proceeds from a loan. Unfortunately, you do not get to deduct the interest accrued on the loan from your income taxes until you start repaying the loan.
The second big advantage is that even though the home is used as collateral against the loan, the homeowner is in no danger of losing their home. They can reside in the home for as long as they like as long as they keep the property in good shape, keep adequate insurance, and maintain property taxes.
The third big advantage is that the lender can never force the homeowner out of their home to recover the debt. Reverse mortgage loans are also known as “non-recourse” loans. That is, the lender has no recourse to any other assets other than the property should the debt exceed the value of the collateral. The loan and the interest accrued are paid off when the homeowner moves out of the house or passes away. Should the resale value of the home exceed the value of the debt, the remainder is distributed among the heirs of the homeowner.
There are some items to note about your California reverse mortgage:
You have to be at least 62 to qualify for a California reverse mortgage, but it's typical to acquire a larger loan if you are older. In addition, lenders limit the amount of the California reverse mortgage to below the property's value. This gives less exposure to risk. A federally-insured loan, the Fannie Mae Home Keeper loan, has a limit of just under US$360,000, no matter the value of the property.
Make sure you assess how much you think the loan will deliver versus how much you will owe. If the price is too high, you should look for a new revenue stream elsewhere.
More California Reverse Mortgage Loan Information:
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