California Reverse Mortgage Loans Unlocks Home Equity For Seniors

The Rise of Reverse Mortgages in California

Reverse mortgages are becoming increasingly popular among seniors in California, largely due to the pioneering efforts of the U.S. Department of Housing and Urban Development (HUD).

What is a California Reverse Home Mortgage?

A California reverse home mortgage allows older Americans to convert a portion of their home equity into cash. This financial tool can be used to supplement social security, cover unexpected medical expenses, fund home improvements, and more. Unlike traditional home equity loans (HELOC) or second mortgages, reverse mortgages do not require repayment until the borrower no longer uses the home as their principal residence.

Eligibility Criteria

To be eligible for a California reverse mortgage, the borrower must:

• Be at least 62 years old

• Own the home outright or have a low mortgage balance that can be paid off at closing with proceeds from the reverse mortgage loan

• Live in the home as their primary residence

Key Differences from Traditional Loans

Traditional second mortgage loans or home equity lines of credit (HELOC) require sufficient income versus debt ratio to qualify, and monthly mortgage payments are mandatory. In contrast, a reverse mortgage pays the homeowner and is available regardless of current income.

Determining the Loan Amount

The amount of a reverse mortgage loan depends on several factors:

• The borrower’s age

• Current interest rates

• Other loan fees

• The appraised value of the home

Repayment Terms

The loan does not need to be repaid as long as one of the borrowers continues to live in the home and keeps the taxes and insurance up to date. If the home is sold or is no longer used as the primary residence, the homeowner or the estate must repay the reverse mortgage, plus interest and other fees, to the lender. The remaining home equity belongs to the homeowner or their heirs. Importantly, no other assets will be affected by a California reverse mortgage loan, and the debt will not be passed along to the estate or heirs.

For more information on California reverse home mortgage loans, call Gold Medal Mortgage at 866-398-4664 or visit Gold Medal Mortgage.