Should You Get a Reverse Mortgage On Your Santa Cruz Home?

Commercials are all over the TV about getting reverse mortgages on your Santa Cruz home.  Sounds great - but there is a lot of conflicting information going around about reverse mortgages.   Can you qualify for a reverse mortgage?  Will it affect your Social Security benefits or Medicare coverage?  Here are some quick answers to your reverse mortgage questions:

• Who qualifies for a reverse mortgage?  The very first requirement is that the borrower be at least 62.  There aren’t any income or credit limitations for a reverse mortgage, and the down payment can be included in the loan.  Even if you don’t have money to put down, and you're on a fixed income, you can be approved for this type of loan.

• How much can I get with a reverse mortgage?  A reverse mortgage is based on the equity in your home and the age of the youngest borrower.  An older borrower will be able to get a higher loan amount than a younger borrower.

• What is the approval process like?  The loan process is similar to that of a conventional mortgage.  Your Santa Cruz home will have to be inspected and appraised for a reverse mortgage.

• How will I get my loan?  You can receive your loan as a lump sum, a line of credit, or even get monthly payments sent to you.  A line of credit will have a variable interest rate, but because you are only paying interest on the money that you have actually borrowed, you could actually save money on interest.  You can use the line of credit just like a checking account.  Loan proceeds from a reverse mortgage can be used for anything you want.

• Will a reverse mortgage affect my Social Security benefits or Medicare?  No, funds from a reverse mortgage do not affect government benefits.

• When do I have to repay the loan?  You will not have to make a payment the entire time you live in your Santa Cruz home. 

A reverse mortgage could help make your later years financially easier.  But, before making a decision to get a reverse mortgage be sure to read all the fine print and do your homework to be sure this is the best financial decision for you. 

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Social Security benefits

Reverse mortgage

Line of credit