According to the feedback we have received from senior California home owners that have been thinking about getting a reverse mortgage over the last five years, there are basically two camps of California reverse mortgage customers.
In Camp number 1 we have senior California home owners that are concerned about their monthly budget. The big increases in property taxes and home owners insurance has severely inflated the total cost of home ownership specially in the state of CA. The resulting mortgage payments and other expenses like food and health care. This group is concerned with overhead expenses and seeking financial help.
In Camp number 2, we have senior California home owners who have homes that are paid off or close to paid off. This camp is mostly interested in the different financial options that a reverse mortgage offers for handy access to cash.
Regardless of which camp you fall in, we have seen an abrupt halt to the pace of rising values of California residential properties. Right now, in some cases some California residential properties have actually gone down slightly.
Those of you in camp 1 that owe close to have of what your property is worth are cutting it very close, because if the stock market falters severely your window of opportunity t get rid of the Principal and Interest expense of your home will be gone.
California property values have risen quite a bit in the last two years, but we are already seeing areas of California where property values have actually softened and bit. A severe slow down in the Chinese economy in addition to the financial crisis in Greece and other countries can easily have a very negative impact on the U.S. economy as well and this would spell very bad news for future California Real Estate prices.
So our best advice for senior California home-owners that are struggling to pay their cost of living expenses:
If you have enough equity in your home, get your reverse mortgage while you still can.
Those of you in camp 1, that have your homes paid off but you have pretty much gone through your liquid reserves have three actually four options:
Option one: Take all the money at once. This is called the Lump Sum program
Option Two: Take monthly payments
Option Three: Line of Credit
Option four: A combination of all of the above.
The maximum pay-out for a reverse mortgage ranges between 50% to 60% of the acceptable appraised value of your home, so if you owe more than 50%-60% of the value of your home, chances are that the money you are eligible for, is not quite enough to pay off your home and the closing costs. In this situation, the only way to get the reverse mortgage is if you pay the difference between what the reverse mortgage loan provides you in the form of out the door cash and what you need to pay off your home. For example, if you are struggling with a home mortgage principal and interest expense of $1300 a month (excluding the property tax and insurance expense) and the loan officer says “Sir, you are going to need to bring a thousand dollars to closing” You will probably say to yourself, “Well, for a thousand dollars, I’m going to save $1300 a month for the rest of my life!” “What a Deal” “Where do I sign?”
But most senior home owners seeking a reverse mortgage when asked to bring $25000 , $30,000 to close their reverse mortgage, the answer will be no if they do not have the money.
A reverse mortgage is designed for financial relief and being asked to write a check for $25,000 to $30,000 or even more, does not sound or even look like much financial relief. The only exception is for those with ample financial reserves that would like to eliminate a high principle and interest mortgage expense to avoid an eventual depletion of their savings a calculated number of years in advance.
With the California State Budget in the red, California senior Home owners will probably not see their property taxes go down anytime soon and Obama-Care does not apply to Home Owners Insurance.
Although one of the most popular states in the country, California is constantly under real environmental threats of Natural disasters that can be very costly in the form of Earthquakes , forest fires from the typically dry climate and Mud-slides during severe rainfall. So it’s safe to say California Home Owners Insurance rates are not coming down any time soon.
Whether you are in camp 1 ( need the money ) or camp Two ( Don’t need the money but interested in another option substantial emergency access to cash, the best reverse mortgage option will probably the same.
At Age 62 or older, if you don’t have ample cash, investment reserves or retirement funds, you probably don’t have a strong case for proving you learned how to save money. Now what do you think happens when you give a ton of money to a person who doesn’t know how to save money?
Although the monthly payment option seems like a viable option, most reverse mortgage Borrowers view the monthly payment program as an option of limited cash availability that they will feel stuck in.
This is the best reverse mortgage program for the home owner in either Camp 1 or camp 2 with a paid off home or nearly paid of home.
The Best reverse mortgage program is the minimum line of Equity program.
The reason the minimum line of Equity program is the best reverse mortgage option for senior California Home Owners is that the minimum draw is only $25,000 which means that the interest expense only comes from the $25,000 that you borrowed and got wire to your bank. Now if you don’t need the money, the money remains in your account. If you spend the money and need a bit more, you can. But you cannot draw out all the funds you are eligible for until a year after the loan closes because the closing costs are much less that the much higher lump sum loan amount.
This is the single greatest feature of the minimum line of credit reverse mortgage Option for senior California Home owners that have homes worth $600,000 or more that are paid off or close to paid off.
As an example, if you qualify for a 55% pay-out on a home valued at over $600,000
You are eligible for close to $300,000! maybe more, but if you only take $25,000, the interest expense is only on the $25,000 instead of $300,000 and the other $275,000 you are eligible for earns interest.
The bottom line is that the minimum line of Equity reverse mortgage Program is undeniably the most sensitive to the inheritance issue and provides the correct answer senior California Home owners that are concerned with leaving as much as they can to their Children and Grand Children. The minimum line of equity allows you the ability to combat unexpected expenses for family emergencies and again, the yearly interest expense is much less which leaves much more money for your family in the future
Reverse mortgage Lenders Direct and Click Quote Save are two or our companies web-sites that provide the best online reverse mortgage comparison shopping services.
The two Best California reverse mortgage Online shopping tools are at these sites: reversemortgagelendersdirect.com or clickquotesave.com
Both web-sites will get you quotes from experienced reputable reverse mortgage lenders that don’t spend millions of dollars on an advertising campaign that uses actors and former actor politician’s to pitch their product on Television. This form of Advertising is the most expensive and ultimately who do you think is paying for it?
If you find getting online an unbearable chore, simply call us direct at 754-701-3260 and we will assist you in any way we can.
Searching for a reverse mortgage lender in California. You can either manually call each one of the lenders below, and or you can fill out the form below to have Click Quote Save compare the market and generate the best quote for you. We don’t charge for our service and it will save you time and money by us comparing the top HUD approved lenders in CA. Every lender can charge a different interest rate or closing costs, so comparison shopping is the only way to receive the best quotes. Click Quote Save is the only free comparison website providing unbiased information and also allowing seniors to easily compare top HUD approved local lenders by completing only 1 form online. To get started complete our form at the top of this page.
dba Treehouse Mortgage Group
Reverse mortgages are a financial tool. Is it the right tool for you? We will help you decide and guide you through the process. Let us help you!
Contact: Galen Call, CRMP in South Bay Area and Central Coast CaliforniaSend Email
dba Reverse Mortgages Only
Seasoned Reverse Mortgage broker offering loan options from multiple lenders. Serving all of California.
Contact: Judy SchwartzSend Email