CalSTRS Retired Educator - Summer 2007 eNewsletter - Is a Reverse Mortgage Right for You?

The equity in your home may be your most valuable financial asset. Thanks to our CalSTRS reverse mortgage program, you may be able to access that equity to supplement your retirement income or meet your financial needs, whether for home repairs, health care costs, an existing mortgage payoff or the vacation of your dreams. And you won’t have to repay the loan until you permanently leave your home.

CalSTRS offers reverse mortgages to CalSTRS members and their parents through our home loan program administrator, Countrywide Home Loans. Homeowners must be at least 62 to qualify.

How It Works

A reverse mortgage provides borrowers with a choice of one lump-sum payment, monthly payments, a line of credit or a combination of these options. The homeowner retains title to the home and continues to pay property taxes and homeowner insurance. When the last borrower dies, sells or refinances the home or permanently moves out, the loan becomes due in full. The amount due on repayment cannot exceed the home’s appraised value.

Payments from a reverse mortgage are usually tax-free, but you may want to discuss the details with your financial adviser as well as your estate planner. A reverse mortgage can be a good option for many seniors, but it may not be right for you.

<< Previous Article || Article Continues >>

[1][2]