Reverse mortgages in California have become extremely popular. They can be a great tool to help a senior citizen increase their income. The costs of a reverse mortgage (usually 5% to 8% of the loan amount), however, make it extremely expensive to obtain.
A new reverse mortgage alternative is available for senior citizens in California. It is called Nestworth. Here is how the program works:
A homeowner that is at least 60 years old enters into an Equity Access Agreement with Nestworth. This agreement exchanges monthly payments to the homeowner in exchange for a portion of the future equity in the home. Unlike a reverse mortgage, debt does not acrue. Exchanging future equity for monthly payments is a great alternative because the California homeowner is not subject to rising interest rates, which is possible with a reverse mortgage.
How is the monthly payment determined? Nestworth has devised a formula based on age, property value, liens on the property, and how long the California senior homeowner wants payments for; anywhere from 10 years to 25 years.
The homeowner will receive more monthly income if they decide to receive income for a shorter period of time.
This program is attractive for several reasons.
There is no up-front cost, which is in stark contrast to a reverse mortgage.
Debt does not accumulate monthly. With each payment received on a reverse mortgage, the debt on the home increases.
Larger monthly payments are available than what can be received on a reverse mortgage.
This program can be used on primary residences and vacation homes in California. Reverse mortgages are available only on primary residences
If you need monthly income, are at least 60 years old, and live in California, Nestworth is a great alternative program you should give serious consideration to.
Do you need help structuring a loan, or getting a rate quote? Call me at (650) 222-0386, or e-mail me
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