Paying Off Hero or Pace Loans in California with Reverse Mortgages

In California many older homeowners have utilized Hero or PACE loans to fund home improvements or renovations. However these home improvement loans can strain finances. But there’s a solution many overlook: reverse mortgages. These special types of home equity loans can assist Californians in tackling these unexpected expenses and regaining financial stability by lowering monthly expenses. Let’s uncover how this option can help.

STRATEGY COVERED: Consolidate/Refinance a HERO or PACE Lien into a Reverse Mortgage to Lower Monthly Expenses.

Transfer the existing Hero/Pace Loan balance into new reverse mortgage to eliminate the ongoing installment payments requirement of the hero/pace lien.* (the underlying hero/pace debt balance does not go away but rather it is “refinanced” into the new reverse mortgage setup.)

*A reverse mortgage does not have a monthly mortgage payment requirement – However – for the loan to remain current at least one borrower must continue to occupy the home as their primary residence and must also continue to pay their ongoing property taxes, homeowner’s insurance and maintain the home for the reverse mortgage to remain in good standing.

Hero or Pace Loans California Reverse Mortgages

Understanding HERO and PACE Liens and Loans in California

Before diving into reverse mortgages, it’s important to understand the concept of Hero and PACE liens. HERO (Home Energy Renovation Opportunity) and PACE (Property Assessed Clean Energy) programs provide funding for eco-friendly home upgrades like solar panels or HVAC systems. However, these programs typically entail placing a lien on the property, which must be repaid along with property taxes, despite their aim to promote sustainability. Typically this is done in installments over a number of years by being added to the property tax bill as a special installment on the tax bill. This creates an additional and ongoing burden for the homeowner each year until the lien is repaid.

Challenges Faced by Older Homeowners in California with HERO or PACE Liens and Loans

Hero and PACE liens can often present major financial hurdles for California homeowners – particularly for older homeowners on a fixed income. These liens have priority over other debts, like mortgages, and not repaying them can result in serious repercussions, such as foreclosure. Moreover, the repayment terms may not match homeowners’ financial abilities, causing stress and doubt.

Reverse Mortgages as a Solution to Payoff HERO or PACE Liens and Loans

(refinance Hero or Pace loan balance into a reverse mortgage)

In such circumstances, a reverse mortgage can often times offer a practical remedy. Unlike regular mortgages that require monthly payments, a reverse mortgage can allow some homeowners aged 62 and above who qualify the ability to convert a portion of their home equity into cash without the need for monthly payments. Instead, the loan is settled when the homeowner sells the property, moves out, or passes away. While a reverse mortgage does not have a required monthly payment – the borrower(s) does have to pay their ongoing property taxes and homeowners insurance themselves plus continue to live in the home.

Eliminate Hero Loan Installment Payments with a Reverse Mortgage *

*KEY TAKEAWAY: Once the HERO or PACE lien is paid off by refinancing the hero/pace loan balance into the reverse mortgage – the property taxes should drop back to their normal level as there is no longer a Hero or Pace loan installment payment rolled into the property tax bill. This alone will lower monthly expenses for the older homeowners in retirement. Borrower with a reverse mortgage is still responsible for paying their ongoing property taxes, homeowners insurance, & home maintenance expenses. Borrower must also occupy home as primary residence.

How This Strategy Works:

Get Rid of a Hero Loan Installment Payment Requirement

By Refinancing or Consolidating the Hero/Pace Loan Balance into a Reverse Mortgage

STEPS INVOLVED TO PAYOFF PACE HERO LIEN:

REQUEST REVERSE MORTGAGE INFO PACKAGE: Homeowner inquiries about reverse mortgage to obtain a personalized quote and preliminary qualifications. This package includes a wealth of info to learn about reverse mortgages including how they work, current rates, fees, responsibilities and more. Accurate Reverse Mortgage has a robust educational package that we send all prospective borrowers looking into reverse mortgages. We are also help assist, guide and to answer all your questions throughout the entire reverse mortgage loan process. The goal here is for homeowner to decide if a reverse mortgage is right for them.

REVERSE MORTGAGE COUNSELING: Homeowner/borrower has a conversation with a HUD approved housing counselor to help educate about reverse mortgages. (can be done via phone)

APPLICATION: Complete a written application for the reverse mortgage with a broker or lender. Submit necessary paperwork needed for the loan documentation for underwriting.

APPRAISAL & UNDERWRITING: An appraisal of the home will be completed to establish home value and condition of home. Loan file is reviewed by underwriting.

HERO/PACE LIEN PAYOFF ORDERED: Escrow will order a written payoff statement on any liens on the home including the HERO/PACE lien(s) to be paid off.

LOAN APPROVAL & CLOSING: If loan is approved by underwriting the file then moves over to closing and closing documents are signed by borrower with mobile notary who can come to borrower’s home or meet at another convenient location.

LOAN FUNDING: The final step is the reverse mortgage loan is funded and all payoffs are issued. Escrow will send payoff funds to the HERO/PACE lien holder. After the HERO/PACE lien is paid off – future property tax bills will revert back to the standard property tax bill before the HERO/PACE lien installment was added into the tax bill. Homeowner should see a should be a dramatic reduction on next property tax bill statement once the HERO/PACE lien is paid off and the lien released from the home.

*DISCLAIMER: With a reverse mortgage at least one borrower must continue to occupy the property as their primary residence. In addition the borrower must pay their ongoing property taxes, homeowners insurance and maintain the home for the loan to remain in good standing.

The outstanding loan balance on the HERO/PACE lien that is paid off by the reverse mortgage consolidates that loan balance into the new reverse mortgage at time of closing and becomes part of the reverse mortgage loan balance owed.

Not all borrowers will qualify – to determine eligibility and qualifications – please give us a call to review your specific situation.

To review your options with reverse mortgages give us a call today at (888) 603-1550 or (619) 294-9820

Group California Reverse Mortgage Clients Home Improvement

Benefits of Using a Reverse Mortgage to Payoff a PACE HERO Loan or Lien

In addition to easing the burden of Hero and PACE lien payments by refinancing the loan balance into a reverse mortgage, reverse mortgages may provide various other advantages for homeowners in California. These could include:

Financial Flexibility: Reverse mortgages may offer some homeowners the freedom to access part of their home equity without the pressure of monthly payments.

No Monthly Mortgage Payments: With a reverse mortgage, homeowners don’t need to make monthly payments to the lender, easing their financial obligations. Important to note the borrower will need to pay their own property taxes, homeowners insurance and other housing expenses each year for the reverse mortgage to stay in good standing.

Stay in Current Home: Homeowners with a reverse mortgage can continue living in their home without fear of displacement as long as they meet loan requirements such as property tax and insurance payments. At least one borrower must continue to live in the home as primary residence for the reverse mortgage to remain in good standing.

Paying Off Liens (refinance lien into a reverse mortgage): Reverse mortgages can be used to pay off existing debts like Hero or PACE liens, helping homeowners eliminate financial burdens. In the case of a HERO/PACE lien loan balance is “refinanced” into the new reverse mortgage and becomes part of the initial reverse mortgage loan amount owed.

Use Funds as Needed: Homeowners can use the proceeds from a reverse mortgage for various purposes, such as covering medical expenses, home renovations, consolidating debts or having a standby pool of fund for future needs.

Conclusion

For older California homeowners dealing with expensive Hero or PACE lien payments, a reverse mortgage might offer a way to take charge of their finances and lower expenses. By using some of the equity in their property, they might be able to clear these liens and significantly lower monthly expenses. It’s important to talk to a financial advisor or reverse mortgage expert to figure out if this is the right choice for them. While the underlining debt balance owed on the HERO or PACE lien does not go away, refinancing that balance into a reverse mortgage could make financial sense and offer reduced monthly payments. With proper research, homeowners can better navigate the tricky world of real estate finances in California and build a safer future.

Homeowners with PACE HERO Loans May Qualify to Reduce Monthly Payments using a Reverse Mortgage *

Request Your Personalized Quote Online Here

or call us at (888) 603-1550 or (619) 294-9820 for faster service

John Correll has helped many California homeowners consolidate their HERO or PACE liens into a reverse mortgage *

John Correll CRMP Certified Reverse Mortgage Professional in California

(888) 603-1550

(619) 294-9820

John Correll, CRMP is a Certified Reverse Mortgage Professional in California with over 25 years mortgage experience. John has dedicated himself exclusively to reverse mortgages and would invite you to call to have a conversation about potential ways to use home equity in retirement.

Providing Reverse Mortgage Services Across the Entire State of California.

John Correll, CRMP

Certified Reverse Mortgage Professional

License info: NMLS # 1004396 CA Dept Real Estate Broker # 01353015

Accurate Reverse Mortgage Corp.

4025 Camino Del Rio S. Suite 339, San Diego, CA 92108

Company License info: NMLS # 2484031 CA Dept Real Estate Broker # 02214678

Additional Reverse Mortgage Resources in California

Find Out if You Qualify for a Reverse Mortgage Which Might Help to Lower Monthly Payments if You Have a HERO or PACE Loan

Call Today: (888) 603-1550

Golden Egg in a House Accurate Reverse Mortgage