A reverse mortgage is a type of mortgage loan that allows you to borrow a portion of the equity in your home. A HECM, or Home Equity Conversion Mortgage, is the most typical type.
You keep ownership of your home when you take out a reverse mortgage, but you don't pay interest every month as you would with a regular mortgage. Instead, the loan is refunded when the final borrower leaves the property.
With this financial help, you still have three primary obligations, even if you do not make a monthly principal and interest payment, to prevent it from going into foreclosure.
Responsibility #1: Your Home Should Be Where You Reside
You must spend a large part of the year living in the home subject to the reverse mortgage; they usually have requirements on how long you can be away from your primary residence while still claiming it as your primary residence. You must typically reside in your home for six months and one day each year. The lender has the right to revoke your loan if you do not meet the conditions of a primary residence.
Responsibility #2: Be Up to Date with Property Payments
● Property taxes
● Insurance premiums
● Homeowner's association dues
● Special assessments
You must make your property fee payments on time to avoid foreclosure.
In determining whether to approve your loan, the lender will consider your ability to pay these expenses and may have to set aside money now to cover them later. Your loan may go into default if you do not pay these costs. To ensure timely payment, lenders will keep track of these expenses throughout the year.
Responsibility #3: Your Home Must Be in Good Condition
The lender will evaluate the property to ensure that the condition of the property meets the investor's expectations as part of the loan qualification process. You must maintain the home in good shape once the mortgage is in place. Repair the leaking roof and fix broken windows. If there is cause for concern, your lender may ask for an examination of your property and demand repairs. Home maintenance is up to you.
We Are Here to Help!
Reverse mortgages can provide people with peace of mind and greater financial security, both for the present and for their future, being a type of loan that offers many opportunities for stability. However, it is vital to know and comply with the responsibilities of a borrower to protect your investment. Therefore, if you are looking for a reliable company to start your mortgage process, call Reverse Mortgage CA. We will help you from start to finish. Don't hesitate to contact us today!