Reverse Mortgage, San Diego
What does a reverse mortgage mean? As opposed to making monthly payments to your bank, the lender sends money back to you instead. Meaning to say, the stream of payments goes the opposite direction from what borrowers are used to. Reverse mortgages give retirees a simple way to tap their home equity without having to experience the risk associated with conventional mortgages.
Some important facts about reverse mortgage, San Diego:
There is no access to the full equity. There is only certain amount for a part of your home equity. The maximum mortgage amount is calculated by the FHA based on the age of the borrower, the appraised value of your home, and the prevailing interest rates. It is essential to remember that borrowers have to pay the costs of a reverse mortgage such as the mortgage insurance premium and charges from a third-party lender.
Various payment plans are available. For example, one type of payment involves taking equal monthly payments that run as long as the borrower is alive and lives in the home as a principal residence. Another is a flexible line of credit, which provides you the option on how much and when to take money out based on the maximum amount of the line. A fixed term of years of payments is also available; after the specified term of payments, you will stop receiving monthly payments even if you are still living in that home.
A reverse mortgage can lose your home. Though a reverse mortgage, San Diego does provide some level of protection to homeowners, they still require you to keep up your end of the bargain. Meaning to say, you need to be responsible enough to do your part; there are “dire” consequences if you do not fulfill your obligations.
What are some responsibilities of borrowers who choose the reverse mortgage?
Paying for utilities, homeowners insurance, real-estate taxes, as well as flood insurance should not be taken for granted by borrowers. Of course, lenders can take appropriate actions if borrowers disregard their responsibilities such as those mentioned above.
It is imperative that you seek help from a mortgage professional to understand the intricacies of reverse mortgages and to avoid complications.