Reverse Mortgages in
Sacramento, California

You’ve probably heard by now about reverse mortgages and how they can bring in extra income to help you in your retirement, through a monthly payment, a lump sum, a line of credit, or a combination of these three. Or you may have heard how a reverse mortgage for purchase can help you finance downsizing to a smaller home.

You may say, that’s all fine, but what about the costs? As with any other kind of loan, there are reverse mortgage costs to consider. Here, we’ll go over what those costs are, so you can take them into consideration. After all, you should prepare for every financial decision with some cost-benefit analysis.

Interest

Interest will likely be the largest of your reverse mortgage costs. Interest accrues in a reverse mortgage just like it does in a regular forward mortgage. The difference is that you do not make monthly interest payments on a reverse mortgage. You pay the interest at the end of the loan, which means it won’t be an upfront cost for you.

Insurance

When you get a reverse mortgage, you have to pay insurance on the loan. You pay an upfront mortgage insurance premium (MIP) of 2 percent of the home’s value (up to a limit of $679,650), as well as an annual MIP of .5 percent of the loan balance. So the insurance comprises both an upfront cost, and a cost to you for the life of the loan.

Origination

The origination fee covers the lender’s costs for processing the reverse mortgage. This fee varies depending on your lender and the value of your home. Without getting too far into the details, we can tell you that origination fees are capped at $6,000, although it’s likely your fees will not be that high. The minimum origination fee is $2,500.  As the name suggests, the origination fee is a reverse mortgage cost you will have to cover upfront, although sometimes it is financed through the loan.

Closing Costs

Similar to a forward mortgage, a reverse mortgage involves closing costs for processing the loan. These costs can include appraisal, inspections, title insurance, title searches, property taxes, credit checks, and recording fees. These costs will be incurred when you close the reverse mortgage.

Servicing Fee

Servicing fees only apply to jumbo fixed rate reverse mortgages. (Jumbo reverse mortgages are designed people with high-value homes, typically above about $1.2 million.) The servicing fee is usually $25-$30, added to the balance of your loan every month. You do not usually have to pay it until the end of the life of the loan. As such, servicing fees are not an upfront cost.

This may seem like a long list of costs to you. With the exception of interest, however, these fees end up costing between $6,000 and $22,000, typically. So, with a reverse mortgage calculator and your knowledge of these costs, you can weigh the benefits of a reverse mortgage against the costs to see if it is the right financial decision for you. If you’d like to do more research, get more information on reverse mortgage costs.

Are you in Sacramento and ready to get a reverse mortgage? If so, apply today to get started on your loan.

Reverse Mortgages in
Rancho Palos Verdes

 

You may have read about reverse mortgages on AARP’s website or elsewhere, and wanted to know more. A Home Equity Conversion Mortgage (HECM), or reverse mortgage, is a great way for people over the age of 62 in Rancho Palos Verdes to turn some of the equity in their home into cash. This cash can be used to purchase a new home, keep up with retirement living expenses, or anything else you might need. If you’re considering one of these loans, you’ll want to know the reverse mortgage pros and cons—before you dive in. Let’s start with the pros.

Benefits of a Reverse Mortgage

Tax-Free Income

Not only does a reverse mortgage allow you to convert your home equity into cash, but also that cash is not subject to any taxes. The money you get from a reverse mortgage is considered a loan advance, rather than income, so it is not taxed. This also means that it will not affect your social security or Medicare benefits. Although a reverse mortgage could affect your eligibility for Medicaid or other needs-based benefits.   A reverse mortgage can still be done and leave the Medicaid in place, but it will take planning to accomplish this.

No Monthly Payments

Another benefit of a reverse mortgage is that, although it is a loan, you do not have to make monthly interest payments on it. Interest still accrues on the money for the life of the loan, but you do not owe any interest money until the loan is over. That occurs when you either move out of the house or pass away, so interest costs can often be covered by proceeds from the sale. The HECM and Jumbo’s are non-recourse loans, so after the last person on the loan passes, they or their heirs will never owe more than the value of the home at that time.

Indeed, since HUD regulates HECM reverse mortgages, they are FHA-insured against your being required to repay more than the value of your home. Jumbo reverse mortgages are not FHA-insured, but offer the same protection against owing more than the value of your home at the end of the term without the upfront costs. Jumbo’s allow you to borrow above the FHA’s lending limit of $679,650, and are designed for high-value homes, typically over $1.2 million.

Multiple Payout Options

When you get a HECM reverse mortgage, you can choose between several options to receive your payment: a lump sum, a line of credit, or monthly payments. Reverse mortgage lenders allow you to combine two of these payment methods, or all three. A fourth payment option is using your reverse mortgage to purchase a new home. These options offer you flexibility unavailable in most traditional loans.

Costs of a Reverse Mortgage

Fees & Closing Costs

While the fees and closing costs of a HECM reverse mortgage can vary, they can be higher than a traditional mortgage and higher, in most case, than a Jumbo. When you get a reverse mortgage, you usually have to pay an origination fee, mortgage insurance premiums (MIPs), and third-party fees like appraisal, title, and inspection. Depending on a number of variables, these fees may or not be more than they would in a traditional mortgage, but you should be prepared to have higher costs. A reverse mortgage calculator can help you in figuring the costs.

Surrendered Equity

Getting a reverse mortgage means you are making a tradeoff. Getting cash now means that you are surrendering some or all of your equity down the road. If you are comfortable making that trade, a reverse mortgage could be worth it for you.

Do you own a home in Rancho Palos Verdes? Are you thinking that a reverse mortgage just might be right for you? Apply today to get started on your loan.

Reverse Mortgage in
Oakland, California

 

There’s a reason that a reverse mortgage is one of the more popular home loans for seniors. The benefits of a reverse mortgage can help people aged 62 and older enjoy their retirement more fully. A Home Equity Conversion Mortgage (HECM), or reverse loan, allows homeowners to turn the equity on their home into cash that they can use for whatever they want or need, including a new home. A reverse mortgage for purchase will allow you to downsize or move without using all the proceeds from the sale of your home on the new home. And for homes valued above about $1.2 million consider a jumbo reverse mortgage. Read on to learn more about some of the other advantages to a reverse mortgage.

Tax-Free Income

The government categorizes the money from a reverse mortgage as a loan advance, rather than as income. That means, even if you choose to receive the proceeds of your reverse mortgage as a line of credit or a monthly payment, no taxes are levied on the money. With a reverse mortgage, you can convert your equity into cash, completely tax-free. (Please consult your tax professional)

Instant Access

Even though you may choose to receive reverse mortgage payments monthly or a line of credit, you can also opt to receive the whole loan as a lump sum. (In some cases you will be limited to 60% of the total amount you qaulify for to be taken as a lump sum at close of escrow)  That way, you can instantly access all of the funds from your home equity, or you can receive it in a combination of the options. There are no restrictions placed on how you use that money, so you can spend it on whatever you want or need.

No Monthly Payments

Although a reverse mortgage accrues interest for the entire life of the loan, you do not have to make a single monthly payment on it. All of the interest is due at the end of the loan. As opposed to a traditional mortgage, you don’t have to worry about making a payment to your lender every month. You will still be responsible for property taxes, hazard insurance, and other fees like homeowners association fees.

Retained Title

Contrary to a common misconception, the bank does not own your home when you get a reverse mortgage on it. You keep the title on the house, and all you have to do is keep occupying it as your primary residence. If your loan lasts until the end of your life, your specified heirs will have an option to purchase or sell the home.

Is a Reverse Mortgage Right For You?

While there are many benefits of a reverse mortgage, costs come along with it. Depending on your situation or your home, there may be other drawbacks as well. Everyone’s financial situation is different, which is why you should take a hard look at yours to see if the benefits outweigh the costs. A reverse mortgage calculator can help you determine whether a reverse mortgage is right for you.

Are you ready to take advantage of the benefits of a reverse mortgage in Oakland? Apply today to get started on your loan.

Reverse Mortgage in
Marina Del Rey, California

 

A Home Equity Conversion Mortgage (HECM, a type of reverse mortgage) in Marina Del Rey can be very beneficial for you if you need additional income during your retirement. Because it’s a loan, it is tax-free and doesn’t affect your Medicare eligibility, though it can affect Medicaid eligibility. Talk with your lender about setting up monthly payments that don’t put you above the Medicaid income threshold. Other payout options include a line of credit, a lump sum, or any combination of options.

Another advantage of a reverse mortgage is to partly finance the purchase of a new home without using all the proceeds from selling your current home.

But just like with any other financial decision, a reverse mortgage has its pros and cons, and you ought to know the costs before you dive in. A reverse mortgage has several different fees and other costs associated with it, so you’ll want to make sure those costs don’t outweigh the benefits for you.

Interest Costs

Probably the biggest cost of a reverse mortgage loan is interest. The costs that build up through reverse mortgage rates are similar to those of a traditional mortgage. Over the life of the loan, interest accrues on the money you borrow. The difference, however, is in how you pay the interest. With a traditional mortgage, you owe your lender an interest payment every month. But with a reverse mortgage, you (or your heirs) pay all of the interest of the loan at the end.

There are several ways to minimize your interest cost. One way is to get a loan when reverse mortgage rates are low. The lower the rate, the less money you’ll owe at the end of the loan. Another method is to keep the amount you borrow to a minimum. With less money to accrue interest, you won’t owe as much at the end of the loan.

Origination Fee

The origination fee goes to the reverse mortgage lenders to cover the costs of processing the loan. The amount you will have to pay for this fee varies, as it depends on the value of your home and the loan program you are using. The origination fee typically can be as low as $2,500, with a hard cap at $6,000.

Mortgage Insurance Premiums

Mortgage Insurance Premiums (MIPs) are required by the FHA so reverse mortgage lenders can recoup any losses in the event of a default, or if the home ends up being worth less than the value of the loan. There is an upfront MIP, due at closing, as well as an monthly MIP for the life of the loan. The upfront MIP amount depends on the amount borrowed, while the monthly MIP is a fixed .50% of the loan balance.

A jumbo reverse mortgage is not insured by the Federal Housing Administration, so MIPs are  not required for that kind of loan. Jumbos are designed for high-value homes, typically above $1.2 million, so that owners can borrow above the FHA’s lending limit of $679,650.

Third-Party Fees

Third-party fees, including appraisal, inspection, and title, cover all of the other closing costs of the loan. These fees are similar to those associated with a traditional mortgage. A reverse mortgage calculator can help you figure out these and other fees.

Servicing Fees

Servicing fees are required only for jumbo reverse mortgages. For any jumbo reverse mortgage with a fixed interest rate, a flat fee of $25-$30 is added to the loan balance every month.

Are you ready to take advantage of the benefits of a reverse mortgage in Marina Del Rey? Apply today to get started on your loan.

Reverse Mortgages in
Manhattan Beach, California

 

If you’re over the age of 60 and living in Manhattan Beach, you may already know that a reverse mortgage can help you turn the equity on your home into cash. If you’re living in a house valued over $1.2 million, you may have heard of jumbo reverse mortgages. A reverse mortgage can be great for you if you’re looking to supplement your retirement income, and a reverse mortgage for purchase can be useful if you want to sell your home and buy a new one.

If you’re considering this financial decision, you may be wondering what the reverse mortgage rates are in your neck of the woods, and what a good rate is. We’ll help you navigate the sometimes confusing world of reverse mortgage rates to help you make the best financial choices on a reverse mortgage.

How Reverse Mortgage Rates Work

Just like a regular mortgage, your reverse mortgage loan accrues interest with time. However, there is a stark difference between how you pay the interest. With a reverse mortgage, you don’t pay interest until the end of the loan. That occurs when you sell your home, move out of the home, or fail to comply with any other terms of the loan. (Such as paying property taxes or hazard insurance)

The amount you borrow in a reverse mortgage depends on your age, your home value, and the interest rate you get. The lower your reverse mortgage rate, the more you can borrow. So, if you think you can get a lower rate, you may want to wait to see if rates dip. If you don’t think you’ll get a lower rate, you may want to jump on it before it goes back up again. Now that you know the gist of how reverse mortgage rates work, you’re ready to learn about the different kinds of rates.

Fixed Vs. Variable Reverse Mortgage Rates

There are two kinds of interest rates offered by reverse mortgage lenders: fixed and variable. Government agencies and investors determine fixed rates, and the rate does not change for the term of your loan. Fixed rates tend to be higher than variable rates. A variable rate depends on an index of interest rates, plus a margin added by the lender. Variable rates change, either yearly or monthly, so your rate could rise or fall. A fixed rate reverse mortgage causes you less risk, while a variable reverse mortgage has greater potential to save you money. A reverse mortgage calculator can help as you figure your expenses.

Qualifying for a Reverse Mortgage

If you find beneficial reverse mortgage rates in Manhattan Beach, you’ll want to make sure you qualify for a reverse mortgage. There are several requirements that any applicant for a reverse mortgage must comply with, such as minimum age and home occupancy. Once you’re sure that you check off everything on the list, you’ll be ready to browse the reverse mortgage lenders in Manhattan Beach to get approved.

Payout Options

While you’re considering a reverse mortgage, think about how you want to receive your money. You can take it in a lump sum, a monthly payment, a line of credit, or any combination of these three.

Are the reverse mortgage rates in Manhattan Beach just right for you to get a loan? If so, apply today to get started on your reverse mortgage.

Reverse Mortgages in
Malibu, California

 

What is the Difference Between a HECM and Jumbo Reverse Mortgage?

If you’re over the age of 60 and you own a home in Malibu, you’ve probably heard of a Home Equity Conversion Mortgage (HECM), more commonly referred to as a reverse mortgage. You may have even heard of a jumbo reverse mortgage. The terms are so similar, you might think that a HECM is the same thing as a jumbo reverse mortgage. While they are like each other, a jumbo reverse mortgage differs from a HECM in some significant ways. Read on to learn more about how these two kinds of loans stack up to each other.

Reverse Mortgage

A reverse mortgage is a loan that turns the equity on your home into cash. To qualify, you must be at least 62 years of age, own your home and use it as your primary residence, and maintain your home in good condition, among other things. You can receive payment for your reverse mortgage in a variety of ways, including a monthly payment, a line of credit, a lump sum, or a combination of two or three of these options. You can also get a reverse mortgage for purchase to help finance downsizing or moving to another home.

Since a reverse mortgage is a loan, the money you borrow accrues interest over the life of the loan. As opposed to a regular mortgage, however, with a reverse mortgage, you do not make a monthly interest payment. You pay all of the interest accrued on the loan at the end of the mortgage’s life. You continue to have to pay your property taxes, hazard insurance, and HOA fees, if applicable.

The Federal Housing Administration (FHA) insures HECMs, which means there is a federal lending limit of $679,650 for a one-family home or a Multifamily home (1-4 Units) on this kind of loan. If you’re looking to borrow more than that, you might want to pursue a jumbo reverse mortgage.

Jumbo Reverse Mortgage

A jumbo reverse mortgage, also called a proprietary reverse mortgage, is an alternative to a more common FHA-insured loan. Since this kind of loan is not insured by the FHA, there is no federal lending limit on it. Without a lending limit, the loan amount of a jumbo reverse mortgage can be as high as $6 million, depending on the value of your home.

Aside from avoiding lending limits, you may also want to get a jumbo reverse mortgage if your home does not qualify for an FHA-insured reverse mortgage. Some homes, or some condos or other planned developments, do not meet the FHA’s requirements for a reverse mortgage, or they may simply not be FHA-approved. To help these homeowners get the funds they need, reverse mortgage lenders offer proprietary loans.

Both a reverse mortgage and a jumbo reverse mortgage have their advantages—like the ability to purchase a new home—and their drawbacks, like reverse mortgage fees. Learn more about the reverse mortgage pros and cons to prepare yourself financially for your retirement.

Are you in Malibu and ready to get a reverse mortgage? Apply today to get started on your loan.

Reverse Mortgages in
Laguna Niguel, California

Are you a retiree who owns a home in Laguna Niguel? If so, you may have already heard about the benefits of a reverse mortgage, perhaps from AARP or someone else. But did you know that there two different types of reverse mortgages available to you in your area? Homeowners like you can receive either a standard reverse mortgage or a jumbo reverse mortgage, depending on the value of your home. Learn about the differences between these two types of loans to see if one of them is right for you.

Home Equity Conversion Mortgage

A Home Equity Conversion Mortgage (HECM), known commonly as a reverse mortgage, turns the equity on your home into cash that you can use for any purpose. As opposed to a traditional forward mortgage, you make no monthly interest payments on a reverse mortgage. Interest still accrues, but it isn’t due until the end of the loan’s life.

A HECM reverse mortgage is insured by HUD through the Federal Housing Administration (FHA). The FHA requires a mortgage insurance premium (MIP) at the closing of the loan, as well as annually throughout the loan’s life. These premiums protect reverse mortgage lenders from losing funds in case of a default, much like insurance on a forward mortgage. MIPs also protect you from having to pay back more than the home is worth in case the home loses value. This is called a Non-Resource loan when you’re protected from paying back more than the home may be worth at the end of the loan term.  Jumbo Reverse Mortgages are also Non Recourse loans, without the upfront or ongoing MIP.

You have several options to receive payment on a standard HECM reverse mortgage. You can choose either a lump sum, a line of credit, or a monthly annuity to receive the proceeds of your reverse mortgage. You can also mix and match two or even all three of these payment options. A fourth payment method, a reverse mortgage for purchase, uses the loan to partially finance the purchase of a new home.

Jumbo Reverse Mortgage

A jumbo reverse mortgage is similar in many ways to a standard reverse mortgage. There are, however, several distinctions between the two that could make a big difference in your loan. The primary difference between these loans is that a jumbo reverse mortgage is not insured by the FHA. This means that in all cases you are not required to pay any MIPs during the life of the loan. Jumbo’s offer the same protections as far as Non Reccourse loans and in that respect, similar to the HECM.

Jumbos are designed for borrowers who want a larger loan amount than is available with a standard FHA-insured loan. This is because the FHA places an upper limit of $679,650 on the loans they insure. With a jumbo reverse mortgage, you are able to borrow more than that, depending on the value of your home. Typically, jumbo reverse mortgages are ideal for owners of homes worth significantly more than the FHA lending limit, around $1.2 million and up.

As with most big financial decisions, you should be familiar with reverse mortgage costs before you dive in head first. A reverse mortgage calculator can help estimate rates. Once you’re sure you’re ready for reverse mortgage services in Laguna Niguel, apply today and get started on your loan.

Reverse Mortgages in
Hollywood, California

Are you 62 or older, own a home and living in Hollywood? You may stand to benefit from a Home Equity Conversion Mortgage (HECM), commonly called a reverse mortgage. Even if you have heard the term thrown around a lot, you might not understand how a reverse mortgage works. A reverse mortgage is similar to a traditional mortgage, but it works differently in a few important ways. Let’s discuss how these reverse mortgage services work.

Reverse Mortgage Basics

A reverse mortgage is a loan that turns home equity into cash. Applicants for this kind of loan must meet certain requirements, including being over the minimum age of 62 and using their home as their primary residence. When you get a reverse mortgage, you can choose a lump sum, a monthly payments, a line of credit, or a combination of the three to receive your payment. Another option is to use the proceeds of your reverse mortgage to purchase a new home. If you live in a high-value home (generally above $1.2 million) a jumbo reverse mortgage can allow you to borrow above the FHA’s upper lending limit of $679,650.

Reverse Mortgage Rates

Reverse mortgage rates play a large role in how the loan works. For one thing, the rate you get on your reverse mortgage will, in part, determine how much money you can borrow. The lower the interest rate you secure, the more money the lender will approve for the loan.

Contrary to a traditional mortgage, a reverse mortgage does not require monthly payments on interest or principal. That doesn’t mean that the loan doesn’t accrue interest. Interest is assessed for the life of a reverse mortgage, but payment on that interest isn’t due until the end of the loan. So, a lower rate is still better for you financially, as you will owe less money when the mortgage ends.

Reverse Mortgage Fees

Like a traditional mortgage, a reverse mortgage comes with fees attached, most of which are due upfront. These fees fall into three main categories: the origination fee, mortgage insurance premiums (MIPs), and third-party fees (traditional closing costs).

Origination Fee

The origination fee goes to your lender and is based on the value of your home. This fee is usually between $2,500 and $6,000, the fee cap.

MIPs

Mortgage insurance premiums make sure that the lender can recoup some of its losses in the event of a default, or if the home’s value at the end of the mortgage is less than the loan amount. There are two kinds of MIPs associated with a reverse mortgage. The upfront MIP is 2% of the home’s value (up to a max of $679,650), which is due at closing. Throughout the life of the loan, there is also an annual MIP of .5% of the loan balance.

Third-Party Fees

The third-party fees are generally the same kinds of fees associated with a traditional mortgage. These fees include title, inspection, appraisal, and other services associated with the reverse mortgage.

If you have more questions about reverse mortgage services, or you’re thinking about getting a reverse mortgage on your home in Hollywood, we’re here to help. Apply today to get started on your loan.

Jumbo Reverse Mortgages in
Beverly Hills, California

Have you ever considered a reverse mortgage, but have too much equity in your home to benefit from one? Well, if you’re over the age of 62 and living in Beverly Hills, you just might be able to get one kind of jumbo-sized home loan: a jumbo reverse mortgage. Even if you’re familiar with a traditional reverse mortgage from AARP or other sources, you may not know how a jumbo reverse mortgage works. Read on to learn more about jumbo reverse mortgages to see if one could be a good financial fit for you.

Not FHA Insured

The Federal Housing Administration (FHA) insures all standard reverse mortgages (HECMs). Because this is the case, most reverse mortgages are subject to certain federal regulations and restrictions. One of those federal rules is the required payment of a mortgage insurance premium (MIP). For a traditional reverse mortgage, the FHA requires an upfront MIP at closing, as well as an annual MIP for the duration of the loan.

A jumbo reverse mortgage is not insured by the FHA, like a traditional reverse mortgage. Since the FHA does not ensure these loans, the MIP rules do not apply, which means the borrower is not required to pay those premiums. Both the HECM (FHA) and the Jumbo loans are Non-Recourse loans. This means that you will never have to repay more than the value of your home. So, whereas the FHA loan charges an insurance premium to protect the borrower, the Jumbo offers the same protections with no insurance charge to the borrower. Currently, the FHA charges 2% of the lower of the lending limit or the home value for the upfront MIP. This could be as much as $679,650 x 2% = $13,593.00. The Jumbo charge for this is zero.

Higher Lending Limit

For standard reverse mortgages, the FHA puts a lending limit of $679,650 in place. If you wanted or needed to borrow more than that, you’d be out of luck. Without a jumbo reverse mortgage, that is. Borrowers getting a jumbo reverse mortgage can often borrow between $600,000 to $6 million, depending on the value of their home.

There are caveats to borrowing amounts on a jumbo reverse mortgage. If your home value is $1.0M or greater, that is when considering a Jumbo may be a better product for you to consider. If your home is less than $1.0M, a standard reverse mortgage is probably better for you. In fact, jumbo reverse mortgages are usually ideal for owners of homes worth a considerable amount more than the federal lending limit. This is true for single-family residences, and multifamily (1-4).

Alternative Lending Option

A jumbo reverse mortgage is proprietary to the reverse mortgage companies that offer them and is designed to be a fixed-rate alternative to a HECM. This means that if, for whatever reason, your home doesn’t qualify for a loan insured by the FHA, or you have a condo worth $500,000 or more, your lender may be able to qualify you for a proprietary jumbo reverse mortgage.

Again, consider the caveat that a jumbo loan may not be the best option for you, even if your home value is high enough. Consider also that the payout options are different than with a HECM reverse mortgage, where you can receive your money as a monthly payment, lump sum, line of credit, or any combination of these three. With a jumbo reverse mortgage, your only option is a lump sum, or a partial lump sum with fixed monthly payments over a max of 5 years.

To make sure a jumbo reverse mortgage is right for you, try using a reverse mortgage calculator to estimate rates, costs, fees, and other factors. Once you’re ready for a jumbo reverse mortgage in Beverly Hills, apply today and get started on your loan.

Reverse Mortgage in
Berkeley, California

Are you considering a Home Equity Conversion Mortgage (HECM), or reverse mortgage, but have no idea what it entails besides what you read about reverse mortgages on, say, AARP’s website? You’re not alone. The reverse mortgage process can be confusing, and each person’s situation will be different. Here’s what you can expect for how much you can borrow, how you can receive your payments, and what some of the costs will be on your reverse mortgage.

Borrowed Amount

The amount of money you can borrow with a reverse mortgage depends on three factors: your age, the value of your home, and the interest rate of the loan. The older you are, the more money you can borrow. Your borrowing power also increases with the value of your home, and is affected by the interest rate; the lower the interest rate, the more money you can borrow.

HECM reverse mortgages are FHA-insured, so they are subject to the FHA’s upper lending limit of $679,650. For higher-value homes (typically $1.2 million plus) many lenders offer jumbo reverse mortgages, which are not insured by the FHA, but follow the guidelines for qualification set by FHA..

You can use a reverse mortgage calculator to get a good idea of how much money your financial institution. Lender will lend you.

Payment Methods

You can expect three different ways to get payments on your reverse mortgage: a line of credit, a monthly payment (term or lifetime), a lump sum, or some combination of all three. A fourth option is a reverse mortgage for purchase. Here’s how each payment option works.

Line of Credit

With a line of credit, the money in the reverse mortgage is held on standby, and withdrawn by the homeowner when needed. The value of a line of credit increases as the value of the home appreciates. Yes, you earn interest on the line of credit for the amount that remains in the line of credit.

Monthly Payments

There are two kinds of monthly payments: term and tenure. With a term payment, the homeowner receives fixed monthly payments for a set term, like five years. Tenure payments provide a fixed monthly payment for as long as the homeowner uses the home as their primary residence, even if the loan balance exceeds the value of the home.

Lump Sum

With a lump sum payment, the homeowner receives the entire balance of the reverse mortgage when the loan closes. Then, the homeowner can use it to pay off another mortgage or purchase a new home. There may be limitations on a full lump sum payment depending on your current loan balance for a HECM. For the Jumbo Reverse Mortgage, there is no limitation. You can take the entire amount at close.

Purchase

Rather than stay in the same home, a borrower can use a reverse mortgage to purchase a different home. This can be useful for people who want to downsize or move to a new location.

Costs

There are many benefits to getting a reverse mortgage, but bear the costs in mind as well. Some reverse mortgage fees include origination fees, mortgage insurance premiums (MIPs), appraisal fees, closing costs, and servicing fees. Interest is another cost you will incur on your reverse mortgage. Reach out to a lender if you have more questions about reverse mortgages.

Are you in Berkeley and ready to get a reverse mortgage? If so, apply today to get started on your loan.