Reverse mortgage loans, just like regular mortgages, enable you to borrow money using your house as a security for your loan. However, while a regular mortgage means making monthly payments to the lender in order to buy your home, a reverse mortgage allows you to get a loan against the equity in your home and have the lender pay you as long as you live in the property.
With reverse mortgage funding, you are responsible to pay your homeowners insurance and taxes in a timely manner, maintain your home regularly, and use it as your primary place of residence. Each month, fees and interest are added to your loan balance, while your home equity diminishes. Once the borrower stops living in the home or passes away, the loan has to be repaid, often by selling the property.
The information here applies to Home Equity Conversion Mortgages, or HECMs, the most common reverse mortgage type. In order to avoid some of the pitfalls that reverse mortgage may entail, we strongly recommend reaching out to experienced and knowledgeable professionals who will protect your long-term interests.

With a reverse mortgage loan, the amount you can borrow will depend on several factors, including:

• The value of your home
• Your age
• The interest rate

Generally, you will have three options for getting the money: monthly payout, lump sum payout and line of credit. The Premiere Homes team can guide you through the different options and help you pick the right one with confidence.

If you are more than 62 years old and in a situation where the equity in your home is your largest asset, a reverse mortgage may be a good idea. However, there are several important factors you should consider before deciding to get a reverse mortgage now. It may be a good time to get a reverse mortgage if:

• You have no other viable option to pay for your living expenses
• You plan to keep living in your home for the rest of your life
• Your home equity is high enough to leave you with reasonable payments after you pay off your existing mortgage
• You have the means to maintain your home and keep up with homeowners insurance and property taxes

Additionally, external factors such as the current housing prices and interest rates can also influence your decision regarding a reverse mortgage loan. Make sure to take your time to evaluate your specific situation and needs and reach out to Premiere Homes and consult our Downsizing San Diego Senior Real Estate Services resources for all the mortgage-related information you may need.

A reverse mortgage loan has to be paid if the borrower stops using the house as their primary place of residence or passes away. Most families choose to sell the home to pay it off. In case you get more for the house than what is owned, your heirs will get to keep the difference and use it.

When the reverse mortgage borrower moves out or passes away, the loan typically has to be repaid. The most common options for paying back a reverse mortgage loan include:

• Selling the house to pay off the balance
• Selling your home for less than the balance and pay the HCEM using the difference
• Providing the lender with a deed instead of going through the foreclosure process
• Having an heir get a new mortgage after the death of the borrower

Paying off a reverse mortgage loan can be a difficult and complex process. If you need more information on the available options, don’t hesitate to give us a call.