California reverse mortgage is considered the best way to convert home equity into cash. Rather than pay the monthly mortgage fees, the homeowner will be getting monthly payments, which is usually tax-free. The CA reverse mortgage is also a smart way for a retired American to have or keep financial security, according to Consumer Reports.
With the CA reverse mortgage, several reasons have been cited in the Bargain Agents as to why it is being chosen by most homeowners, which includes home improvements, for supplemental income aside from the pension and as payment for sudden medical expenses.
However, not everyone is entitled to this, as certain criteria must be met to determine a person's eligibility for application, like the applicant should be at least 62 years. Other requirements include:
- A homeowner should have paid the mortgage for several years in order to establish home equity.
- In addition, the homeowner should have no record of delinquency in terms of paying for the federal debt, or either, at least should have an active paying arrangement or has completely paid off the usual mortgage or has only a remaining small balance.
- The homeowner should be able to indicate the means to pay the current expenses like the house insurance or property taxes.
- As mandated by The US Department of Housing and Urban Development, all persons who have interest in reverse mortgage should first attend a counseling, either over the phone or in person. A loan originator will offer a list of counselors approved by the HUD from which to choose from that can thoroughly explain each aspect of reverse mortgages to help the homeowners come up with an informed decision.
- Moreover, the property mentioned in the application should be the primary residence and not a rental or a second-home property. It could be a residence with two to four units or just a single-family unit.
CA reverse mortgage could also be used for properties like a condominium unit, as long as its is a primary residence or approved by the HUD.