Reverse Mortgage Company Serving All of California Exploring Reverse Mortgage Options

  

Reviewing What a Reverse Mortgage Is

  

Accurate Reverse Mortgage Corp California

California HECM and Jumbo Reverse Mortgages

California Reverse Mortgage Company Route 66 Logo All About Reverse Mortgages

What is a reverse mortgage?

Reverse mortgage loans are a way for older homeowners to convert their home's value into tax-free cash, without having to sell or move. Homeowners who are 62 or older may be able to use a HECM to borrow against the equity of their homes (for the fha-insured hecm product).  There is also an option for borrowers as young as age 55 with the proprietary reverse mortgage loan.
  

Here’s how a reverse mortgage works:

  

  • Qualifying homeowners can choose to receive tax-free payments from reverse mortgage either on a monthly basis, in a lump sum, or as a line of credit.
  • Underwriting will do a financial assessment to make sure things make sense and passes some basic tests.
  • No monthly repayments are required while a borrower lives in the home.
  • Reverse mortgage lenders recover the loan amount, plus interest when the home is sold (because owners choose to move, or pass away)
  • When the loan is paid in full, all equity associated with the property will be distributed to your heirs or the borrower at close of escrow from the sale.
Keep in mind:
Reverse mortgage borrowers continue to own their homes. Because there are no monthly loan payments due, the amount owed grows over time. That means that the amount and the remaining equity in the home decreases.
Borrowers must continue to pay homeowner’s insurance and property taxes during the loan period. It is also the borrower’s responsibility to keep up with repairs. In fact, if a borrower fails to adhere to any of these obligations, it may become immediate cause for the loan to become due. In which case, it would become payable in full.

Do I qualify for a reverse mortgage?

  

You must be age 62 or older (55 on some options) and you must occupy the home as your primary residence – for the majority of the year. Borrowers must own the home outright or have a low enough balance on the existing mortgage that it can be paid off from the proceeds of the reverse mortgage. To qualify borrowers must also pass a financial assessment review to make sure they can handle expenses including ongoing home expenses.
Each borrower listed on the title must apply for the reverse mortgage loan, attend a reverse mortgage counseling session and sign the loan application papers. The counseling is either handled in person, or over the telephone.
  

Does my home qualify for a reverse mortgage?

  

First of all, your residence must be appraised and reviewed. The reverse mortgage must also be the only mortgage held against the residence. That means that if there is a current mortgage on the property, it may be able to be paid off with the proceeds of the reverse mortgage.
Examples of qualifying homes:
  • Single Family One-Unit Residences
  • 2-4 Unit Owner-Occupied Residences
 These residences  may qualify with certain restriction - call to inquire:
  • Manufactured Homes
  • Condominiums and
  • Planned Unit
  • Developments
  

How is the reverse mortgage loan amount determined?

 
The amount of the loan is based on:
  • The age of the youngest borrower
  • The appraised amount of the property
  • Current interest rates.
  • Type of reverse mortgage product applied for
  

What are the reverse mortgage options?

  

   
HECM -- The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage that is insured by the Federal Housing Administration (FHA). The FHA guarantees that HECM lenders uphold their servicing obligations, governs how much HECM lenders may loan to qualified borrowers, and limiting loan costs. Loan counseling is required, by an approved HUD counselor to help educate borrower prior to getting their reverse mortgage.
   
HECM offers 4 draw options:
  1. Monthly income for a fixed term, or life
  2. Line of credit
  3. Lump sum
  4. Any combination of the above 3

   

Proprietary or "Jumbo" Reverse Mortgages -- These loans expand on what the HECM product offers by offering large loan amounts up to $4 million.  They tend to be signed for higher valued properties - however they also can work for condos or other properties that don't fit HUD's HECM property requirements.

 

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