Reverse mortgage loans are a popular financing option in Bakersfield, California, allowing senior homeowners to tap into their home’s equity.
The most popular type of reverse mortgage is the Federal Housing Authority (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 Work?
Reverse mortgage loans allow homeowners 62+ to access a portion of their home equity 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 Bakersfield, California, who want to stay in their homes, but also want or need additional cash flow. The funds from a reverse mortgage can be used for any purpose, including home improvements, medical expenses or a more enjoyable 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
With a reverse mortgage loan, borrowers are not required to make monthly mortgage payments as long as they continue to live in the home, maintain it and pay property taxes and insurance. Optional monthly payments can provide significant financial relief for seniors on a fixed income.
Retain Homeownership
Reverse mortgage borrowers retain ownership of their homes. Seniors can continue to live in them for as long as they meet the loan requirements, allowing them to age in place surrounded by familiar surroundings and close to their community.
Tax-Free Proceeds
The proceeds from a reverse mortgage are typically tax-free, as they are considered loan advances and not income. This can be advantageous for seniors looking to maximize their retirement funds without increasing their tax liabilities.**
Supplement Retirement Cash Flow
A reverse mortgage loan allows homeowners aged 62 and older to access their home equity without selling it, creating an important source of supplementary cash flow for seniors on a fixed income, helping to cover living expenses, medical bills or other financial needs.
Flexible Payment Options
Reverse mortgages offer multiple disbursement options, such as a lump sum, monthly payments, a line of credit or a combination of these options, allowing borrowers to choose the payment method that best suits their needs and preferences.
Non-recourse Loan
Reverse mortgages in Bakersfield, CA, are non-recourse loans, meaning that if the loan balance exceeds the home’s value when it’s sold or the borrower passes away, neither the borrower nor their heirs are responsible for the difference. The loan is insured by the Federal Housing Administration (FHA), which covers any shortfall between the home’s value and the loan balance.
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*This advertisement does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation.