California Reverse Mortgage

California Reverse Mortgage
by Simon Lowa

All of us are looking for financial security at the end of the day and hence, we take various steps to insure our future through different forms of investments. A house is perhaps the single, largest investment which an individual will usually make during his lifetime. A substantial amount of financial resources are invested to not just buy a house but also to make it livable and maintain it thereafter. When an individual is in active service with a regular salary or income coming in at the end of each month, it is possible to maintain a house and a certain standard of living. The problem, however, arises when you have retired from regular service and the inflow of a regular salary has stopped. At times like this, a need for financial resources may arise at any point of time and it is then that your house will prove to be a sound investment. A California reverse mortgage, therefore, is the best form of a special category of home loans for any retired, senior citizen residing in California and having a property to his name.

A California reverse mortgage allows the home owner to convert the equity on his house into cash and this amount can be paid to the borrower in a number of ways, be it a lump sum payment or monthly installments. The payment on the California reverse mortgage on your home can also act as a supplement to your funds and social security provisions, if you so desire. In fact, this is one of the most feasible forms of home loans as it does not require any form of repayment on the mortgage for as long as you use the mortgaged property as your primary residence. Also, any of the fees or charges associated with the reverse mortgage plan can be easily financed as they are included as part of the loan.

The payment made to the borrower for a California reverse mortgage is not taxable, as it is just a borrowing shown against your home and since you have already paid for your home when you purchased it, you need have to make any further payments for it. All that the borrower needs to pay towards the mortgaged property are the property taxes, maintenance costs and hazard insurance for the property. The amount of mortgage loan on your house will only become due and payable once you have passed away or have ceased to use the mortgaged property as your primary residence. If the spouse of the borrower is also a legal co-owner of the mortgaged property, then the benefits of such mortgage will also extend to the spouse. The spouse can; therefore, continue to reside on the property till they pass away or decide to move on.

In the event that you decide to sell off the property, which you have placed for a California reverse mortgage, the balance amount of the loan on the property will become due and payable. The borrower can only claim such portion of the sale proceeds from the house, which is over and above the loan balance due. The biggest advantage of the reverse mortgage scheme is that as the house itself stands for the loan, there will never be a debt on the borrower or his heirs and hence more and more retired American citizens, who are homeowners, are opting for this form of house loan and therein, lay the popularity of the reverse mortgage plan. So, if you too have led an independent and financially secure life so far and hope to spend the last days of your life in an equally comfortable and financially independent manner, then the scheme of putting up your house for a reverse mortgage loan is just perfect for you.