Reverse mortgage loans are a popular financing option in Atascadero, California, allowing senior homeowners to tap into their home’s equity.
The most popular type of reverse mortgage is the FHA-insured Home Equity Conversion Mortgage (HECM) loan. Unless noted otherwise, we’re referring to HECMs when discussing reverse mortgages.
How Does a Reverse Mortgage Loan Work?
Reverse mortgage loans allow homeowners 62+ to access a portion of the equity in their home without having to make monthly mortgage payments, so long as the borrower takes care of property charges, like insurance, taxes and upkeep.
Reverse mortgages are a great option for seniors in Atascadero, California, who want to stay in their homes, but also want additional cash flow. The funds from a reverse mortgage can be used for any purpose, including home improvements, medical expenses or having more fun in retirement.
Reverse mortgages are available to homeowners age 62 and older who own their home outright or have a low mortgage balance that can be paid off at closing with proceeds from the reverse mortgage loan.
Reverse Mortgage Loan Benefits
People get reverse mortgages for many reasons, including:
No Monthly Mortgage Payments
Unlike a traditional mortgage, a reverse mortgage does not require monthly payments. Instead, the borrower must pay for property-related charges like taxes, insurance and home upkeep. The loan is repaid when the homeowner sells the home, moves out or passes away. Optional monthly payments can help alleviate financial stress and provide more flexibility in budgeting.
Supplement Your Income
A reverse mortgage allows homeowners to tap into their home’s equity and convert it into loan proceeds, providing a steady source of tax-free cash flow.** This can be particularly useful for retirees who may have limited sources of income or need additional funds to maintain their lifestyle.
Non-recourse Feature
Reverse mortgages are non-recourse loans, meaning that the homeowner or their heirs will never owe more than the home’s value when the loan becomes due.* This non-recourse feature protects the borrower and their family from being responsible for any remaining loan balance if the home’s value decreases.
Payment Option Flexibility
Reverse mortgage loans offer various payment options, including lump sum, monthly payments or a line of credit. Homeowners can choose the option that best suits their needs and financial goals.
Homeownership Retention
With a reverse mortgage loan, the homeowner retains the title and ownership of the property, allowing them to continue living in their home for as long as they meet the loan requirements.
FHA-insured
Most reverse mortgages in the United States, including those in Atascadero, CA, are insured by the Federal Housing Administration (FHA). This insurance provides additional protection to borrowers, ensuring they will continue receiving their loan proceeds even if the lender goes out of business or fails to make payments as agreed.
Interested in a Reverse Mortgage in Atascadero?
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*There are some circumstances that will cause the loan to mature and the balance to become due and payable. Borrower is still responsible for paying property taxes and insurance and maintaining the home. Credit subject to age, property and some limited debt qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change. **This advertisement does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation.