Reverse Mortgage Tips
If you have a California reverse mortgage...
You're about to get a California reverse mortgage and you're due to sign the papers and start receiving money. Before you sign, you should go over a few things in your head to make sure the mortgage suits your lifestyle.
The best part about a California reverse mortgage is the part that everybody remembers: the loan doesn't have to be repaid until the last surviving borrower passes away or fails to use the property as their primary residence for 12 consecutive months. One part that people fail to remember is that the loan can also be called in by the lender for other reasons.
What if the owner has problems keeping up with the California Reverse Mortgage?
If the property owner does not provide proper maintenance to the property, the lender may be able to call in the loan. Since the loan uses the property as collateral, the lender has a vested interest in that property being in about the same shape as it was when they extended the loan. The maintenance required is usually the routine maintenance needed to keep the property fit for living. No leaky roofs, good plumbing, no termites, etc. If you foresee some issues that may come up regarding home maintenance, make sure you set aside some money from the proceeds of your California reverse mortgage to cover the costs.
If the owner fails to pay the property taxes during the course of the reverse mortgage, the lender can call in the note. The lender made a loan on a property that was clear of property taxes and the lender has it in the contract that the property should remain so for the course of the loan. This is pretty reasonable contract detail. Make sure you set aside money from the reverse mortgage to cover the cost of property taxes.
What happens to my California Reverse Mortgage if I'm incapacitated?
If by some unfortunate chance that you have to be hospitalized for more than 12 consecutive months, the lender may call the note in. If you do have to be hospitalized, keep that in mind.
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