How Does Reverse Mortgage in California Work?

Have you been hearing about Reverse Mortgage and wondering what Reverse Mortgage is?

A reverse mortgage happens to be a financial instrument that enables senior citizens to access the equity in their homes, without credit or income qualifications. A significant difference between a conventional mortgage and a reverse mortgage is that no interest or principal payments are needed on the home even if the borrower has been occupying the property. Repayment is needed only if the borrower moves out of the property for more than consecutive 365 days or if the borrower sells the property.

Who Can Qualify for Reverse Mortgage California?

In order to qualify for best reversemortgage California, the borrower needs to be a minimum of 62 years of age and requires to occupy the property as his principal residence. Moreover, any existing mortgage on the property should be low enough so that it can be paid off with the proceeds of the reverse mortgage. There are no credit or minimum income requirements as no payment is needed on the mortgage. The proceeds from this loan can be used according to the borrower’s discretion and would not be subject to income tax payments.

Although credit does not constitute the qualification process, a pending or current bankruptcy will need court approval before closing. Reverse mortgage in California follows the FHA standards for property types which imply that FHA-approved condominiums, PUDs, and most 1-4 family dwellings will qualify. Manufactured housing will qualify on the basis of standard FHA guidelines.

Applicants must undergo an approved counseling course, before beginning the loan procedure for an HUD / FHA reverse mortgage. The counseling is offered at no or minimal cost. This counseling aims to serve as the borrowers’ safeguard as it makes sure that the borrowers clearly understand the concept of reverse mortgage. The counselor thoroughly explains the financial and legal obligations of reverse mortgage. The borrower receives a “certificate of completion” which is essential for the loan application to be processed.

Cash from Reverse Mortgage in California

The reverse mortgage in which the property owner receives a credit line or cash from an existing home is the most common type of reverse mortgage. Money from a reverse mortgage might be distributed in the following ways:

·         As cash payment or cash advance every month, applied for the owner’s life or for a fixed term. Monthly payments might be arranged by HUD.

·         As a Line of Credit (like a home equity line of credit) which maximizes the available money that can be withdrawn when needed.

·         As a lump sum, in cash, at the time of settlement – This offers the cash instantly. But, the interest fees happen to be the maximum.

·         The borrower can also select a combination of the above ways.

If you are thinking of opting for a reverse mortgage in California, you can visit the website realestateloansdirect.com for thorough and extensive information. You can also call at 424 225 2167 for assistance. The qualified mortgage professionals help clients with the best reverse mortgage solutions. These professionals help clients with every step of the reverse mortgage process. They are just a call away and are ready to educate you about reverse mortgage loans in California. You can rely on them!