Reverse Mortgage in
San Mateo County, California
A home equity conversion mortgage (HECM), commonly called a reverse mortgage, is a way to use your home’s equity to create extra income in retirement. They’re backed by the Federal Housing Administration to guarantee that you’ll never owe more than the value of your home.
This type of loan is the reverse of a traditional mortgage because the lender pays you a monthly payment (or a lump sum, or opens a line of credit) on the equity you already have, your equity decreases over time, and the loan plus interest is paid back when the home is sold or refinanced.
Why You Should Consider a Reverse Mortgage in San Mateo County
To qualify for a reverse mortgage, you must be 62 or older and have enough equity in your home to pay off any existing traditional mortgages. You’re also required to receive information about reverse mortgages from an approved counselor for a nominal fee.
The amount that is available in San Mateo County can be up to the Federal Housing Administration (FHA) limit of $679,650 or the value of your home, whichever is lower. If you have sufficient equity a reverse mortgage for purchase would allow you to sell your house and buy a new one, financed by the reverse mortgage.
A common way to pay off a HECM reverse mortgage is to sell the house, though that’s not the only option. However you or your heirs choose to pay it off, though, you can’t be made to pay more than the value of your home, even if the mortgage amount is more than that.
If you have a high-value home a jumbo reverse mortgage could allow you to borrow above the FHA lending limit. They typically work better for older borrowers at least in their 70s, with homes valued around $1.2 million or more. Because jumbo reverse mortgages aren’t backed by the FHA they aren’t subject to the FHA lending limit and some FHA regulations. However, the Jumbos offer the same protections as the HECM at time of sale. You will never owe more than the homes’ value.
Understand the Fees and Costs of a Reverse Mortgage in San Mateo County
You will need to pay $550 or more (for high-value homes over $1M) to get your home appraised. Then, there are loan origination fee, closing costs and mortgage insurance fees to guarantee that you’re paid and to cover the lender if the value of your home drops below the loan amount. However, most or all of these fees can be added to the loan balance. So, when the loan is eventually repaid, they will automatically be paid.
What are the Different Types of Reverse Mortgage Available in San Mateo County?
The types of reverse mortgages in San Mateo County include a fixed rate and a variable rate version. For the HECM the fixed rate product requires that you take the lumps sum at close and no more proceeds are available during the life of the loan. This is why they call the fixed a closed-end loan. For the Jumbo fixed product, you can either take a lump sum payment and/or create a credit line with the balance and take that over the next 5 years or less. The HECM variable rate starts with a certain interest rate that then changes periodically (either monthly or Annually) —though never more than 5-10% above the original rate (5% for Annual Adjustable and 10% for Monthly Adjustable)—and allows you to take monthly payments for life or a certain term, a line of credit, or a combination.
Jumbo reverse mortgages are also available in San Mateo County in order to pull equity from a house with a value of $8, 000,000 or more. Maximum loan amount is $4,000,000.
Average Reverse Mortgage Rates in San Mateo County
Reverse Mortgage Alert maintains a table showing average monthly rates from Jan. 1, 2015 to two months before the current month. Depending on a number of factors, such as your age, home value, zip code, and more, your rate will be higher or lower. A reverse mortgage calculator may help give you an idea what you’re looking at, but the best option is to contact the experts at Trinity Reverse Mortgage.
Apply now to find out if you’re eligible!