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Toll
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#8 Is there a limit on the amount of money I'm eligible to receive?
#9 What type of payment plans are available?
#10 What happens if I'm drawing a monthly income and I need additional money?
#11 What if I need a monthly income that is greater than what is being offered?
#12 Am I charged interest on the entire amount of money I'm eligible to receive?
#8 Is there a limit on the amount of money I'm eligible to receive?
Yes. Unlike a traditional loan, you will receive less with a Reverse Mortgage. Since the loan amount, accumulative interest, etc., are charged against the home's equity, there must be a sufficient amount of equity in your home to cover the deferred payment to the lender.
#9 What type of payment plans are available?
You can receive all of your proceeds in a lump sum, a monthly income or leave the funds in a line-of-credit and draw from it as needed. The unused credit-line balance appreciates in value for your benefit. You may also choose a combination of these options. Available funds are payable to the last surviving borrower.
#10 What happens if I'm drawing a monthly income and I need additional money for emergencies or for other reasons?
You have the right to convert to a line-of-credit, draw out the needed cash and then change back to the monthly plan. Your monthly proceeds will be less, depending on how much you withdrew from your account.
#11 What if I need a monthly income that is greater than what is being offered under the lifetime income plan?
You can increase your monthly income under the 'term option plan,' which pays you a monthly amount for a set period of time. When the term expires so do your payments, but you will still have the benefit of continuing to live in your home.
#12 Am I charged interest on the entire amount of money I'm eligible to receive?
No. The interest accumulates against funds you actually borrow, which added to your outstanding loan balance. This, in turn, decreases the existing equity in your home.
A credit-line balance is not considered borrowed funds.
#13 What is my personal liability or my estate's liability on this type of loan?
The liability is limited to the loan balance or the value of your home upon repayment, whichever is less. Any equity in excess of the outstanding loan balance is yours or it will be payable to your estate. You can never owe more than the property is worth at the time of sale!
#14 What if I have a mortgage or lien against my home?
As long as you have sufficient equity, you can still obtain a Reverse Mortgage. Proceeds must first be used to pay off any existing mortgages or liens. This results in the elimination of your monthly payment and thereby creates spendable dollars for yourself.
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| CA Dept. of Real
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