Reverse Mortgage in
San Diego County, California
A reverse mortgage also called a home equity conversion mortgage (HECM), is a home loan that helps generate income for homeowners over the age of 62. Homeowners are able to access the equity they have built up over years of mortgage payments to help pay for other expenses or generate extra income. Reverse mortgages are a great option for many people who have recently retired or face increasing cost of living because of medical expenses or other rising costs.
As with any mortgage, the homeowner retains ownership and can pass the home on to heirs. While it is common to sell the house to satisfy the loan when it matures, there are other ways to pay off the loan.
As with any loan, there are costs and fees associated with getting a reverse mortgage. Though they are a great option for many people, you may wonder if a reverse mortgage is the best option for you and your circumstances. Understanding the many pros and cons of a reverse mortgage is the key to figuring out if you should consider a reverse mortgage.
What are the Pros and Cons of getting a Reverse Mortgage in San Diego County?
San Diego County is known for having high property values. This means that you likely have a decent amount of equity stored up in your home. It can be maddening to be sitting on hundreds of thousands of dollars of value with no way to access that value. A major benefit of a reverse mortgage is that it allows you to access that capital without moving out of (i.e. selling) your home.
Another advantage is that with a reverse mortgage you don’t have to worry about eviction or giving up control of your home. As long as you maintain the home, continue to pay property taxes and insurance, and use it as your primary residence you have a right of lifelong residency.
There are some disadvantages to a HECM. When you convert equity to income you lose some of your equity in the home. Also, the home must remain the primary residence for at least one homeowner, which could make the loan fall due if, say, one homeowner dies and the other moves into a nursing home.
The costs and fees associated with reverse mortgages might outweigh the advantages if you are planning to sell your house in the next few years, plus the loan would fall due when you sell the house. However, if you are planning to buy another home, a type of HECM called a reverse mortgage for purchase would allow you to buy the new home without tying up all the cash from the sale in the new home.
A potential disadvantage for homeowners in high property value areas is the FHA’s upper lending limit of $679,650. If you have a high-value house, especially one worth $1.2 million or more, a jumbo reverse mortgage, which allows you to borrow above the FHA’s limit, might work well. The Jumbos offer fixed rates only at this time, but they do allow a credit line if you don’t want all the money at once.
Understanding Reverse Mortgage Rates in San Diego County
A number of factors go into determining your interest rate, including age and state, and you may be able to get a slightly lower rate for annually adjustable or monthly adjustable rate mortgages. Reverse Mortgage Alert maintains a table showing average monthly rates in California from Jan. 1, 2015 to two months before the current month. This is an average for the whole state, though, so rates in your area may differ. For a more accurate quote for your situation, contact Trinity Mutual at 1-877-739-2510 or apply for a reverse mortgage now.
No matter who you use as a reverse mortgage broker or lender, there will be additional costs and fees besides interest. See our summary of costs and fees of a reverse mortgage if you are looking for a reverse mortgage calculator. While no one likes paying fees, you shouldn’t let this dissuade you from taking out a reverse mortgage. There are fees associated with any loan.
If you are ready to get extra income by taking out a reverse mortgage on your home, apply now!