Explore the potential benefits of reverse mortgages for California homeowners in this article. Learn how these financial solutions can enhance retirement plans, offering tax-free proceeds and the retention of property ownership, among other advantages.

A reverse mortgage can enable California homeowners to access some of their home equity as a stable post-retirement strategy. Designed for individuals aged 62 and older (55 on some products), it can offer a financial solution to support retirement needs.

Before proceeding with a reverse mortgage, it’s important to understand how they work, as well as weigh the pros and cons of the various reverse mortgage types and how they compare to traditional mortgages. Seeking guidance from a specialized reverse mortgage professional in this field is recommended, as they can provide tailored advice.

If you’re contemplating this form of retirement planning using home equity in California, exploring the primary benefits of reverse mortgages is great first step.

John Correll, CRMP at Accurate Reverse Mortgage in California has well over 25 years mortgage lending experience and has carved out a career specifically in reverse mortgages.

Give John Correll a call today at (888) 603-1550

Ten possible advantages of a reverse mortgage tailored to California homeowners:

Boost Retirement Income

Californian homeowners aged 62 and above who qualify for a reverse mortgage can convert part of their home equity into cash, providing a supplement to their income during retirement.

Lower Monthly Payments

Unlike conventional mortgages, reverse mortgages typically don’t require monthly payments. Repayment is deferred until the homeowner moves out or passes away. (note: during the loan the borrower will need to live in the home plus pay their ongoing home expenses like property taxes, homeowners insurance and maintenance costs)

Stay in Current Home

With a reverse mortgage, homeowners retain ownership of their property as the deed stays in their name or in their trust. During the life of the reverse mortgage they can remain in their home while they handle paying their own taxes, insurance, and maintenance and at same time enjoy the benefits that the reverse mortgage offers them.

Flexible Ways to Receive Loan Funds

California homeowners with a reverse mortgage have a range of options on how they wish to receive their loan proceeds, including lump sums, monthly payments, lines of credit, or a combination, to suit their financial needs. The method to receive the money from their reverse mortgage is set at the time of closing with some flexibility to adjust over time.

Funds are Loan Proceeds and Paid “Tax-Free“

The funds received from a reverse mortgage are usually tax-free, providing a tax-efficient income source during retirement. Funds paid to borrower are considered “loan proceeds” and as such the IRS does not consider them taxable income.

Postponed Repayment – No Required Monthly Mortgage Payment

During the life of the reverse mortgage the borrower is not required to make a monthly mortgage payment like they would on a traditional mortgage – this offers incredible freedom in retirement.

HOW THIS WORKS: Repayment of a reverse mortgage in California occurs when there is a maturity event. Maturity events can include things like the homeowner moving out of the house, selling the property, after the last borrower dies or failing to keep property charges current (property taxes, homeowners insurance, hoa dues and maintenance of theme)offering financial stability during

Protection from Loss: Non-Recourse Feature

Reverse mortgages are non-recourse loans, meaning homeowners or their heirs aren’t personally liable if the loan balance exceeds the home’s value.

Protection Even if a Market Downturn

With a HECM Reverse Mortgage (Home Equity Conversion Mortgage) the FHA insurance protects homeowners against declines in the housing market, ensuring they or their heirs won’t owe more than the home’s appraised value at repayment.

Create an “Emergency Fund” for Future Access

Reverse mortgages can often serve as a vital source of funds for unexpected expenses, medical bills, or home repairs, allowing homeowners to tap into their home equity as needed. Holding funds in the line-of-credit or borrowers savings after drawing from the reverse mortgage can help prepare the borrower for future expenses that might come out of nowhere.

Flexible Usage of Funds

With a reverse mortgage, borrowers have the flexibility to use the funds as they see fit. Whether it’s covering daily expenses, medical bills, home improvements, or even funding travel and leisure activities, the choice is theirs.

SUMMARY

Getting more information about reverse mortgages will help you decide if they’re a good fit for you. After discussing their pros and cons with your advisor, you’ll have a clearer understanding.

Various types of reverse mortgage programs might help you stay independent and manage cash flow if your retirement benefits aren’t sufficient or you could simply use some additional funds to better enjoy retirement.

But remember to review all the details carefully before settling on a reverse mortgage as your final choice.

I trust you’ve found the information provided beneficial. Choosing the right partner for your reverse mortgage is significant. It would be my privilege to earn your trust and provide outstanding service, from our first discussion to the final closing and beyond. Please feel free to reach out to me—I’m here to help.

-John Correll, CRMP 

California Certified Reverse Mortgage Professional John Correll CRMP

(619) 294-9820  |  (888) 603-1550

Accurate Reverse Mortgage Corp.

4025 Camino Del Rio S., Suite 339

San Diego, CA 92108

Licensing Info:

NMLS # 2484031, 1004396 CA Bur Real Estate Broker # 02214678, 01353015

California Reverse Mortgage Company – Accurate Reverse Mortgage Corp

Serving the Reverse Mortgage Needs of the Entire State of California

Benefits of Reverse Mortgages For California Homeowners