Sacramento Reverse Mortgage Tip
July 29th, 2010 categories: Sacramento Real Estate Videos, Seniors
Reverse Mortgage for seniors over age 62 has greatly improved since 1988 when the Insurance Companies and the Banks made the rules that hurt the senior citizen. Since 2001 FHA and HUD made it a fantastic program & put safeguards in to protect the senior.
The senior retains the home and the home remains in their name until they decide to either sale the house or if they die. There is a cap on the value FHA & HUD place on the home of $417,000. For example, if your home has a value of $350,000 you can actually use $200,000-$300,000 of that equity. In other words you have access to 58%-85% of the equity.
Did you know you can actually buy a house and use a Reverse Mortgage during the purchase? Check out the HECM’s Reverse Mortgage through FHA.
This is a good way for a senior who is “house rich but cash poor” to secure retirement and enjoy those “Golden Years.” You need to have 15%-40% equity in order to do a Reverse Mortgage and once you qualify and meet with an FHA counselor to go over the terms, any money you pull out of your equity is tax free and does not interfere with Medicare or Social Security.
There are 3 different ways to use a Reverse Mortgage
- Seniors can take out a lump sum
- Seniors can have a line of credit
- Combination of any of the above
The senior must continue paying property taxes and any maintenance on the home. In California, the average senior opts to get around $1500 per month to supplement their income. With Baby Boomer’s born between 1946 through 1964 most will have a mortgage and this is a solution to consider. Even if the senior has used all the equity in the house, they may remain in the home.
For more information be sure to take a look at the Reverse Mortgage for Seniors through HUD.
Many times people ask what happens when the seniors who took a reverse mortgage on their home, dies. The heirs have the option of paying off the home or selling the house. However, the heirs have 12 months to either pay off the mortgage or sell the house.. Otherwise, the house will go into foreclosure. Under some circumstances, a few extensions can be requested if the property is visibly for sale.
It is important to note that if what is owed on the mortgage exceeds the value of the house (what the house sells for), the heirs owe nothing.
Perhaps, you would like to live in a gated community or an active community for adults, be sure to check out homes for sale by clicking on Sacramento Real Estate Neighborhoods.
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