You may or may not have heard about a reverse mortgage. A reverse mortgage is a type of loan where the homeowner withdraws a part of their equity without the need to repay the loan until they leave the property. One aspect to keep in mind, however, is that a reverse mortgage borrower won’t be able to take out a loan higher than the value of the home.
Does this look like an attractive deal to you? Before you take the plunge, here are several essential aspects to know about a reverse mortgage:
Primary Homeowners Must be 62 Years and Above
If you are in Los Angeles and are looking to get a reverse mortgage, you need to be 62 years old and above. If the spouse is under 62, on the other hand, you may still be granted a reverse mortgage loan if you meet certain criteria, such as that you’re the primary homeowner, and you are current with your property taxes, insurance, and other mandatory obligations.
All Fees are Disclosed
All the fees associated with your reverse mortgage will be disclosed to you in detail, and this gives you less to worry about. These fees include upfront and recurring ones over the life of the mortgage, and they will be added to the final payoff.
No Pre-Payment Penalties
If you wish to make a partial or full repayment of the loan before it matures, you can do so without having to worry about any pre-payment penalties.
No Monthly Payments
As mentioned, a reverse mortgage is a loan that doesn’t require you to pay monthly until you leave the property. However, you will need to adhere to the loan requirements, such as:
- Property taxes must be current.
- One of the borrowers must occupy the property as their primary residence.
- There must be current and adequate homeowner’s insurance on the property.
- You must be able to conduct routine maintenance in the property to ensure that it’s in good condition.
Not Based on Credit Score or Income
Unlike traditional loans, a reverse mortgage is not solely dependent on your credit score or your income. To be granted the loan, you need to demonstrate your capacity to continue paying taxes and insurance on the property.
Retain Home Ownership
With a reverse mortgage deal, you will still retain homeownership and get to live in your current home. That’s why despite the loan, you’re still required to continue the payment for insurance, property taxes, and the maintenance of the property.
If you are thinking of getting a reverse mortgage, here are two tips to keep in mind:
1. Choose a Reputable Lender
Getting a loan from a reputable mortgage lender is essential. A lender with an excellent reputation can guarantee you in-depth knowledge and expertise that will make everything easier to understand and the process more seamless.
2. Seek Advice from Finance Experts
Seeking the advice and guidance of finance experts will help you make an informed decision to get the right deal. Financial experts are more knowledgeable regarding the facts of the loan, so you will be able to weigh your options better.
Getting a reverse mortgage deal shouldn’t be done without careful thought. For this reason, seek professional help so that you’ll be able to get the best deal with your interests in mind. If you have decided to get a reverse mortgage in Los Angeles, call us on (818) 601-2231 today to see how your needs can be fulfilled!