Costa Mesa Reverse Mortgage Details Warrant Serious Scrutiny
Whenever another celebrity appears on Costa Mesa TV screens to offer their two cents' worth about the value of reverse mortgages, young people can be forgiven if they tune out the message. After all, reverse mortgages are only available to homeowners who are 62 years of age or older.
It's also highly probable that many of the Costa Mesa homeowners who meet the age eligibility requirement tune out, too. Experienced people tend to be suspicious of strangers whose message seems to rely on the "trust me" element. The TV actor-spokesperson may be a beloved personality, but it's important to remember he's reading a script composed by less-beloved advertising writers.
Reverse mortgages can, as promised, provide some valuable "peace of mind" for cash-strapped seniors. By using the home as collateral, reverse mortgages provide access to a portion of the equity that's been building up over the years. The cash can be distributed in different ways: as a lump sum, in equal monthly payments, or as a line of credit. As long as the borrower stays current with property taxes, homeowner insurance, and the home's maintenance, no repayment is due until he or she either dies or decides to move. It can make for an appealing solution—but there are downsides that a celebrity spokesperson may or may not pinpoint.
Recently, national web monolith lendingtree.com provided a rundown of some drawbacks that Costa Mesa homeowners should take into account. Their list of "pitfalls" fell into two categories.
First are the costs that go with the reverse mortgage proposition:
- The loan's balance grows every month, so the owner's equity shrinks accordingly.
- Most reverse mortgages have adjustable interest rates—a troubling prospect for those who fear that inflation (and rates) are on the rise.
- Mortgage insurance (and premium charges) are required.
- Closing and ongoing fees are comparatively high.
Second, qualifying for a reverse mortgage isn't automatic. There are requirements that the borrower continues living in the home most of the time as well as demonstrate the ability to continue paying all ongoing costs. There can also be a number of possible financial repercussions; for instance, if RM proceeds are distributed in monthly payments, the added income could affect SSI or Medicaid benefits.
The ultimate bottom line for Costa Mesa homeowners is the comforting reality that they have been building equity year after year—and a reverse mortgage is only one way to access it. For all your real estate options, we hope you'll feel free to call whenever our professional insight can be of help.
We are built on a philosophy of Heritage & Hustle. The L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s L3 mission is to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. The L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, The L3 has grown to a full staff of 25 serving over 300 clients a year. The L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has The L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to The L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact The L3 today at 714-444-4663 or email us at info@thel3.com
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