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Reverse Mortgages Woodland

What Are Reverse Mortgages?

Reverse Mortgages WoodlandThis type of mortgage is very complex, and your decisions should be weighed carefully. DC Lending LLC is a mortgage company with a team of loan officers that are very educated and experienced in working with reverse mortgages. If you are considering getting a reverse mortgage, come and meet with one of our loan officers and let us help you make the right decisions.

What Is Equity?

Equity is the portion of the home that you own; this goes hand in hand with the value of the house. Your equity increases based on different factors; it will increase as you pay off your mortgage and own more and more of the property. It will increase if the housing market changes and your home is valued higher. And it will increase if you have made home improvements and an appraisal deems that your house is worth more. To qualify for a reverse mortgage, you need to own the entirety of the property or be very close to paying the home off. A reverse mortgage loan will not exceed the value of the home. Equity is only usable if you sell the home, use it to buy another house, or borrow against it.

How Does Reverse Mortgage Work?

When you get a reverse mortgage, you borrow money against the value of your home, and you can receive this money in a lump sum, in monthly payments, or a line of credit(LOC). Your age and your home’s value determine the amount of money that you can receive. A reverse mortgage does as it implies; instead of the homeowner paying monthly mortgages, they get to get paid. The only payments that the homeowner needs to make on the house are property taxes, insurance, interest, and other costs associated with the reverse mortgage. Most people leave their property to their heirs as an inheritance to either own it or sell it. When you have a reverse mortgage, the more equity you use, the less there is to leave as an inheritance.

Types Of Reverse Mortgages

By far, the most popular reverse mortgage is a home equity conversion mortgage(HECM). Two other types of reverse mortgages are much less common but still available options—single-purpose reverse mortgage and property reverse mortgage.

Our loan officers at DC Lending LLC would be happy to explain each type and help inform you about which option would be best suited for you. HECM’s are federally insured and have no income restrictions or medical requirements, which is a big reason why they are the most popular choice.

When you have decided to get a reverse mortgage, there are many requirements with the possibility of mandatory counseling. Doing this may be required because of the complexity and risks associated with these types of mortgages. Being thoroughly educated on the costs, payment options, and responsibilities that come with these mortgages is crucial.

Reverse Mortgage Payment Options

Mortgage Questions WoodlandWhen you get your reverse mortgage all set up, you will have to choose a method of payment. You can receive all of the money in a lump sum and spend it how you wish. Lump-sum is the only option available with a fixed-rate mortgage(FRM). You can get equal monthly payments that remain the same and are received at the same time every month. You can opt for term payments, which will be equal but only for a select amount of time, generally around ten years or so. A LOC is also an available option. LOC’s allow the homeowner the draw from the funds whenever they need and will only pay interest on the money that they withdraw. Combining more than one payment plan is also an option. Equal monthly payments, in addition to a LOC or term payments combined with a LOC, are both alternative options.

Mortgage Experts

Our team at DC Lending LLC are experts in mortgages and are happy to assist you in finding the best possible option. When it comes to reverse mortgages, it is ideal to owe little to nothing on the home and have relatively high equity to receive the best results from this kind of mortgage. This loan is a good option for people who are considering using it for the long-term. If a reverse mortgage is not a long-term solution, it might be a better idea to find a different option. Come in and talk to one of our loan officers. Our family-owned company has been helping Woodland residents get home loans and establish reliable reverse mortgages for many years. Call DC Lending LLC or stop by our office today for a loan that you’ll love!


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