REVERSE MORTGAGE MAY BE WRONG FOR YOU
• Loan Balance increases over time as interest on the loan accumulates
Since you don’t make monthly interest payments to the lender, the monthly interest is added the principal balance each month.
• As your home equity shrinks due to interest, you have fewer assets for your heirs.
If home appreciation is very low or negative, your principal balance on the loan my outgrow equity growth resulting in less equity in the property.
• Fees are much higher than traditional loans
Origination fees and loan fees on reverse mortgages are much higher than traditional loans due to the higher risk associated with reverse mortgage loans.
• High Interest Rate
The interest rate is usually higher than a traditional mortgage or home equity line.
• Not ideal loan for short term purpose due the fees of obtaining loan
Due to the high cost of obtaining a reverse mortgage, this loan may not make sense for short term living arrangements. The cost need to be considered and compared to that of a traditional loan over the same period or time.
• Loan becomes due when borrower passes away, property is no longer the borrower’s primary residence or borrower moves out of property for more than 12 months
• You are still responsible for costs of owning and maintaining a home.
As the owner of the property, you are still responsible for property taxes, insurance and maintenance on the property.
At California Mortgage Advisors Inc., we genuinely believe that we offer our customers the best mortgages in the industry. We have offered a variety of loans since 1993, which means our Mortgage Advisors have successfully matched tens of thousands of borrowers with loans tailored to meet their needs and unique financial situations. Our Mortgage Advisors are available at (800) 927-6560 to answer your questions or click here to apply online.