What is a reverse mortgage?

A reverse mortgage is a type of loan often used by seniors in California who are in need of additional income or home equity. It allows a homeowner to take out a loan against the equity in their home and receive payments from the lending institution over time. Reverse mortgages allow a senior homeowner to access the equity they have built up in their home. The main benefit of a reverse mortgage is that the homeowner will not have to repay the loan until they either pass away, sell the home, or move out of it permanently. When taking out a reverse mortgage, the home must be the primary residence of the borrower. The borrower must also be 62 years or older and eligible for Social Security or Medicare benefits. Reverse mortgages can be beneficial for seniors who need extra income to supplement their Social Security or Medicare benefits. A reverse mortgage can provide extra cash, without requiring the borrower to make loan payments while they are in their home. The terms of a reverse mortgage will vary depending on the type of loan taken out and the financial institution involved. Reversing mortgages tend to have higher interest rates than traditional loans, but are a great option for older people in need of additional income or home equity.

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