Reverse Mortgages:the Facts

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Reverse mortgages (also called "home equity conversion loans") enable older homeowners to tap into built-up home equity without selling their home. The lending institution gives you funds based on your home equity amount; you get a one-time amount, a payment each month or a line of credit. The borrowed money does not have to be paid back until the homeowner sells his residence, moves out, or passes away. You or an estate representative is required to repay the reverse mortgage loan, interest accrued, and other finance charges when your house is sold, or you are no longer living in it.

Who is Eligible?

The conditions of a reverse mortgage loan typically are being 62 or older, maintaining your property as your primary residence, and holding a small balance on your mortgage or owning your home outright.

Reverse mortgages are helpful for homeowners who are retired or no longer bringing home a paycheck but need to add to their income. Rates of interest can be fixed or adjustable while the funds are nontaxable and don't adversely affect Social Security or Medicare benefits. The lender cannot take the property away if you outlive your loan nor can you be required to sell your residence to repay the loan amount even when the loan balance is determined to exceed current property value. Call us at 310-379-5997 if you'd like to explore the benefits of reverse mortgages.

Real Property Finance can walk you through the pitfalls of getting a reverse mortgage. Give us a call: 310-379-5997.

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