Real estate in California has been in the news frequently during the last few years. Imagine you are not one of millions of homeowners caught in the real estate bust. You managed your finances well and now, nearing retirement, your mortgage is nearly paid off.
You anticipate having more free time and would like to travel. However, the economy being what it is, you realize discretionary income is a precious commodity; so extended travel is not a prudent decision. Perhaps you have also have some home renovation plans on the horizon. Both options require liquid assets.
You recently saw an advertisement extolling the virtues of reverse mortgages. It said you can take cash out of your home and use it to supplement your retirement pension. This way you get to stay in your home rather than having to sell it to take advantage of the equity. A reverse mortgage sounds exactly like what you need. Right?
Don't be too certain. If you think a reverse mortgage might work for you, make sure to get all the facts and even consult with an attorney specializing in real estate. They will review your mortgage and answer all your questions. Many reverse mortgage lenders neglect to give seniors the complete story. Do your research before you take the reverse mortgage plunge.
Reverse mortgages contain very high front loads such as upfront costs paid at closing that come directly off the top of your equity. Closing costs, an integral part of initial costs, are considerably higher in reverse mortgages than conventional mortgages. You are also responsible for taxes, insurance and even mortgage insurance.
Mortgage insurance is required to eliminate the risk of the value of the home decreasing rather than protecting against a default as with conventional mortgages. Mortgage insurance guarantees the lender will receive full repayment, and is used to cover the lender in the event the mortgage is held for an extended period.
Reverse mortgages do work for many seniors -- just make sure it is the right option for you.
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Considering a Reverse Mortgage in California?
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