California has enacted a new law that will make obtaining a reverse mortgage in California a bit easier.  Governor Arnold Swarzenegger has signed the law that will provide protection to California homeowner’s who are looking to obtain a reverse mortgage.

California homeowners will now receive independent counseling advice from certified counseling agencies.  These agencies will explain the pros and cons of obtaining a reverse mortgage and will not be a part of the deal.  These counselors will be from outside agencies that do not deal with the bank or lender.

All documents will be translated into the language of the borrower.  With so many languages being spoken in California, this will help insure that the process is completely understood by the borrower. 

Lenders will now have to stop forcing borrowers to obtain annuities as a part of the reverse mortgage deal.

This new law and these new changes will insure that homeowners know exactly what they are getting into when obtaining a reverse mortgage.  The new law also insures that lenders will not be able to take advantage of borrowers or add additional conditions to the loan agreement.

You’re thinking about working on the house and taking out a home equity loan to pay for it all.  But you’re worried about getting your moneys worth out of the work.  What if you’re making a bad investment?  Here are a few things to consider:

Will it make your living situation more comfortable?  If you’re scrambling for space, ran out of enough cabinets, or try to beat the rush hour for the bathroom, it’s probably a good idea to take the plunge.

Will you be living there for a while?  Home equity loans won’t pay off if you plan to move within the next two years.  Decide how committed you are to the house you’re in to determine if it’s worth the costs.

What are you upgrading?  Typically, bathrooms and kitchens have the best return for their investment when you’re updating them.  Thermal windows and new roofs are nice too and likely to help, but no one’s going to care if you put in new carpet.  If making your money back should you sell the house matter to you, make sure your equity is going towards a project with an expected return.

With these three questions in mind, you should have a solid start to making your decision.