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Trinity Reverse Mortgage

Santa Monica

Reverse Mortgage in
Santa Monica, California

Are you ready to put your home’s equity to work for you? A Trinity Reverse Mortgage allows older homeowners to take advantage of their home’s equity and receive cash to use for daily expenses, big purchases, vacations, or anything else they need. Here are some ways Trinity Reverse Mortgage can help you achieve your financial goals.

A Quick Look at Reverse Mortgage in Santa Monica

It’s your money so why should it be tied up in your home? A home equity conversion mortgage (HECM), or reverse mortgage, gives homeowners the freedom to utilize the equity in their home. This special loan is for homeowners that are at least 62 years old, own their home, and reside in their home. What makes a reverse mortgage unique is it doesn’t have to be paid back until the borrower no longer resides in the house, the borrower dies and there is no eligible spouse, or the borrower fails to meet the obligations associated with the mortgage.

Reverse Mortgage Alert’s table of average monthly reverse mortgage rates in California from Jan. 1, 2015 to two months ago can help get data if you plug the rates into a reverse mortgage calculator, but the table averages rates from the whole state, so your area may differ. Speaking to the experts at Trinity Reverse Mortgage will get more accurate figures for you personally.

Is a HECM Reverse Mortgage the Right Type Of Loan For You?

Even if you meet the qualifications, a reverse mortgage isn’t for everyone and there are strict borrower requirements that must be met before the loan can be finalized. These requirements include:

  • Age
  • Reverse mortgage as primary lien
  • Primary residence requirements
  • Keep paying taxes and insurance
  • Maintain the property in good condition

How Does a HECM Reverse Mortgage Compare to a Jumbo Reverse Mortgage?

A HECM reverse mortgage allows older homeowners who meet the requirements to convert a portion of the equity in their home to cash. Many people use it to supplement their income. Instead of paying the loan back like a traditional mortgage, the money is repaid when the homeowner dies or no longer lives in the home.

A variant called a HECM for purchase allows borrowers to finance part of the purchase of a new home through the mortgage, keeping some of the proceeds from the sale of the old house for other uses.

FHA insurance guarantees that HECM borrowers won’t be stuck with an underwater mortgage—owing more than the house is worth. The FHA’s upper lending limit is $679,650.

A jumbo reverse mortgage is a proprietary mortgage which follows FHA guidelines but is not FHA-insured. This makes it well-suited for borrowers with homes valued at about $1.2 million and up who want to borrow more than the FHA’s upper lending limit of $679,650. Also, Condos that are valued at about $500,000 and up may use the Jumbo reverse mortgage.

What are the Costs Associated With a Reverse Mortgage?

Like with any mortgage, there are some costs associated with a reverse mortgage that can include:

  • Loan origination fee – HUD caps this fee at $6,000. The minimum origination fee is $2,500.
  • Appraisal – A standard tool in mortgages to make sure the value of the home is accurate. Appraisal costs can vary, but you can generally plan to spend around $550.
  • Closing costs and third-party services – Include things like title searches, title insurance, land surveys, and credit check fees, among other expenses.
  • Mortgage Insurance Premium – This Federal Housing Administration requirement ensures borrowers get the loan payments in the amount they expect, and that if the homes’ value falls below the amount of the mortgage, lenders still get repaid the full amount of the loan. Currently, FHA charges 2% of the home’s value up to $679,650.  So that would be $13,593 on a home with a max value of $679,650.   If the home was worth $200,000 x 2% = $4,000 MIP.

A reverse mortgage is a great option for older homeowners who want to use the equity they’ve built up over the years without selling their house. It can seem complicated but that’s where we at Trinity Reverse Mortgage come in. Let us show you how easy applying for a reverse mortgage can be.