Many Investors do not realize what a reverse mortgage is, let alone what the laws in California are on them. But this money-saving information can be invaluable, so it’s important to acquaint yourself with California laws regarding reverse mortgages.
What is a Reverse Mortgage?
A Reverse Mortgage is a different type of home loan for California Senior homeowners that requires no monthly mortgage payments. A reverse mortgage is a loan for seniors age 62 and older. Home Equity Conversion Mortgage reverse mortgage loans are insured by the (FHA) Federal Housing Administration and allow homeowners to convert their home equity into cash with no monthly mortgage payments. A reverse mortgage can use up the equity in your home, which means fewer assets for you and your heirs. If you do decide to look for one, review the different types of reverse mortgages, and comparison shop before you decide on a particular company.
Reverse Mortgage Eligibility
To qualify for the HECM reverse mortgage in the United States, borrowers generally must be at least 62 years of age and the home must be their primary residence (second homes and investment properties do not qualify).
Types of reverse mortgages:
- Single-purpose reverse mortgages, which are offered by some state and municipal government agencies and non-profits.
- Federally-insured reverse mortgages, known as Home Equity Conversion Mortgages.
- Proprietary reverse mortgages, which are private loans backed by an issuing company.