Reverse mortgage loans are a popular financing option for Santa Maria, 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 Santa Maria, 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 Benefits
People get reverse mortgages for many reasons, including:
Optional Monthly Mortgage Payments
Unlike a traditional mortgage, monthly principal and interest payments are optional, so long as the borrower lives in the home and pays property-related expenses, like insurance, taxes and upkeep. The loan balance is repaid when the homeowner sells the home, moves out or passes away, helping to ease financial burdens and provide additional cash flow for other expenses.
Borrowers can elect to receive their proceeds in a number of ways, including lump sum, line of credit and monthly payments. As the FHA insures them, HECMs are non-recourse loans, meaning the homeowners or their heirs will never owe more than the home’s market value at the time of sale.
Supplemental Retirement Cash Flow
A reverse mortgage loan can provide a consistent source of tax-free cash flow to supplement Social Security, pensions or other retirement savings, helping homeowners maintain their quality of life and cover living expenses during retirement.*
Home Appreciate Potential
Santa Maria, CA, is known for its robust real estate market, meaning homeowners with reverse mortgage loans could benefit from increasing property values over time. As the home’s value appreciates, so does the available equity, which could result in a larger payout over the life of the loan.
Financial Flexibility
Reverse mortgage loans offer multiple payout options, such as a lump sum, monthly payments or a line of credit. This flexibility allows homeowners in Santa Maria, CA, to customize their reverse mortgage to meet their specific needs and financial goals, like funding home improvements, paying for healthcare expenses or simply having a safety net for unexpected costs.
Staying In Your Home
Reverse mortgage loans allow seniors to age in place and maintain their independence without the pressure of making mortgage payments. Instead, they only need to cover property expenses like taxes, insurance and upkeep, which can be particularly valuable in Santa Maria, CA, where the cost of living and housing prices may be higher than in other areas.
Non-recourse Loan
A reverse mortgage is a non-recourse loan, meaning the homeowner or their estate will never owe more than the appraised value of the home at the time of repayment.** This feature protects borrowers and their heirs, who will not be responsible for any deficiency if the loan balance exceeds the home’s value.
Interested in a Reverse Mortgage in Santa Maria?
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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. **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.