Reverse Mortgages In California

About Reverse Mortgages

What is a Reverse Mortgage?
A reverse mortgage provides financial security because you do not have to make payments or repay the loan as long as you occupy your home as a primary residence. Thus, the reverse mortgage program enables seniors that may be "real estate rich and cash poor" to unlock the financial potential in their homes, and let their homes work for them. In order to avoid foreclosure: property taxes and homeowners insurance still need to be paid, and the home must be properly maintained.

In general, the reverse mortgage does not become payable until the senior homeowner no longer occupies the property as his or her primary residence.

Thus, the reverse mortgage is simply a loan against the borrower's principle residence. The borrower retains ownership of the home. If the borrower decides to sell the property, any funds in excess of the payoff amount belong the borrower, as is the case with a regular mortgage or home equity loan.

Who is Eligible For a Reverse Mortgage?
Reverse mortgages are available to homeowners that are age 62 and older. All persons listed on the deed to the property must be at least age 62. The borrower must occupy the property as his primary residence and all existing liens must be paid off at the time of settlement. Thus, the proceeds of the reverse mortgage are available to payoff any outstanding mortgages against the property. As an additional safeguard, the Department of Housing and Urban Development (HUD) requires that each potential reverse mortgage borrower be advised about the reverse mortgage program by an independent HUD-approved counseling agency. This counseling is free of charge to the borrower.

How Does a Reverse Mortgage Differ From a Home Equity Loan?
While both reverse mortgages and home equity loans enable senior homeowners to turn the equity in their home into spendable dollars, there are important differences between these two types of mortgages.

First, home equity loans require regular monthly payments in order to repay the loan. These payments begin as soon as the loan is settled. In contrast, a reverse mortgage does not have to be repaid as long as the home remains the senior's primary residence. In other words, the loan becomes due only when the senior no longer occupies the property or by failure to pay property taxes, homeowners insurance, and/or properly maintaining the home.

Second, home equity loans are based on the borrower's income and credit history. A home equity loan borrower may be required to re-qualify for the home equity loan each year. If the borrower does not qualify, than the lender may require that the loan be paid in full immediately.

Reverse Mortgage Plans
FHA - HECM (Home Equity Conversion Mortgage)
  • Insured by FHA
  • Flexible Income Payment Option . Growing Line of Credit
  • Maximum Lending Limit - $ 625,500
Jumbo Reverse
  • For Property of $2 Million or Higher.
  • Higher Equity Release Options. No Maximum Lending Limit.