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Serving All Ventura County, Conjeo Valley, Thousand Oaks, Westlake Village, Oak Park, Moorpark, Agoura Hills, Calabasas, Camarillo, Ventura Oxnard and everywhere in between!
Reverse Mortgage Frequently Asked Questions
What is a Reverse Mortgage?
Who Qualifies?
What Does Matter?
What Doesn't Matter?
What Are the Benefits of a reverse mortgage?
How Do I Get the Money?
How Does a Reverse Mortgage Differ from a Home Equity Loan?
Where can I Get More Information?
What Areas Does Team O'Connor Cover?
What is a Reverse Mortgage?
A Reverse Mortgage is a unique loan program that enables homeowners that are age 62 and older to use their equity without creating a monthly payment obligation. Thus, the reverse mortgage program enables seniors that may be “real estate rich and cash poor” to unlock the financial potential in their homes, and let their homes work for them. Additionally, the reverse mortgage has no income or credit requirements to qualify.
In general, the reverse mortgage does not become payable until the senior homeowner no longer occupies the property as his/her primary residence. At that time, the outstanding principal and the accrued interest become due. Typically, the loan is paid off with the proceeds of the sale of the home from the borrower’s estate. However, the borrower’s estate/family may decide to refinance the loan and retain the property. Any proceeds in excess of the amount owed to the lender belong to the borrower or the borrower’s estate.
Who Qualifies?
Reverse mortgages are available to homeowners that are age 62 and older. All persons listed on the deed to the property must be at least age 62. The borrower must occupy the property as his primary residence and all existing liens must be paid off at the time of settlement. Thus, the proceeds of the reverse mortgage are available to pay off any outstanding mortgages against the property.
What Does Matter?
Age
Value of Home
Location of Home
Existing Liens
Property must qualify
What Doesn't Matter?
Credit
Income
Loan to Value
Liquid Assets
Health
Money to be used for….
What Are the Benefits of a reverse mortgage?
There are several benefits associated with the reverse mortgage. First, there are no income or credit requirements when qualifying for this loan. Second, the money received from this loan is not taxable as income. Third, the borrower has no repayment obligations until the property is no longer his residence. Thus, the borrower may live in the property until his/her death without ever making a payment back to the loan. Another significant benefit of this loan is the security of knowing that reverse mortgages are fully insured under the federal government’s Federal Housing Administration’s mortgage insurance program. Consult your tax advisor.
How Do I Get the Money?
With a reverse mortgage, you have six payment options to choose from:
LUMP SUM CASH: Draw the maximum amount of cash.
LINE OF CREDIT OPTION: Draw out cash at the times and in the amounts of your choosing up to the maximum amount. The money not drawn does not accrue interest and increases in value each year.
TERM OPTION: Receive equal monthly payments for a fixed period of time that you select, for example, 5 or 10 years.
TENURE OPTION: Receive equal monthly payments for life or as long as you occupy your home as your primary residence.
MODIFIED TERM OPTION: Set aside a portion of loan proceeds as a line of credit and receive the remainder in the form of equal monthly payments for the fixed period of time that you have selected.
MODIFIED TENURE OPTION: Set aside a portion of loan proceeds as a line of credit and receive the remainder in the form of equal monthly payments.
How Does a Reverse Mortgage Differ from a Home Equity Loan?
While both reverse mortgages and home equity loans enable senior homeowners to turn the equity in their home into spend able dollars, there are important differences between these two types of mortgages.
First, home equity loans require regular monthly payments in order to repay the loan. These payments begin as soon as the loan is settled.
Second, home equity loans are based on the borrower's income and credit history. A home equity loan borrower may be required to re-qualify for the home equity loan each year.
Where can I Get More Information?
To learn more about reverse mortgages and other types of financial alternatives,
please contact Michael O’Connor at:
TEAMOCONNOR
C/O ProLine Mortgage, Inc.
600 Hampshire Rd., Suite 110
Westlake Village, Ca 91361
805/413-8359
What Areas Does Team O'Connor Cover?
Serving All of Los Angelesy
Ventura County
San Fernando Valley
everywhere in between!
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