What is Reverse Mortgage

A Great Benefit for Seniors to Gain Financial Security

Reverse mortgages allow homeowners aged 62 years or older to withdraw some of the equity in their home and convert it into cash – and not have to pay it back until they move out or pass away. Reverse mortgages are popular amongst seniors who have equity in their home and want to supplement their income.

The U.S Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) offers the Home Equity Conversion Mortgage (HECM), one of the most popular reverse mortgage programs. The HECM is a safe alternative resource that can provide older Americans with greater financial security and independence.

Benefits You’ll Love About FHA Financing

Withdraw equity and turn it into cash

Home Equity Conversion Mortgage Program

Take advantage at age 62 years or older

Can provide financial security and independence

Information on Reverse Mortgages

Below, you will find expandable sections that give you information on Reverse Mortgages. If you are ready to apply for a loan, click here and it will take you to our secure online application. If you still have questions, our loan officers are just a phone call away (805.543.LOAN)

HECM Loan Specification

The HECM standard loan requires an Initial Mortgage Insurance Premium of 2% of the FHA maximum claim amount.You may apply for a HECM regardless of whether or not you purchased your home with an FHA-insured mortgage, but must meet the following specifications:

  • 62 years of age or older
  • Property used as collateral must be the primary residence
  • Property being used as collateral must be owned or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan
  • Must be single-family home or a 2-4 unit home with one unit occupied by the borrower (HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible)
  • No delinquencies on any federal debt, suspensions, debarments, or excluded participation from FHA programs
  • Completion of HECM counseling

 

After Loan Has Closed

Once the loan has closed, the borrower must adhere to the following:

  • Occupy the home as a principal residence
  • Make timely payments of their property taxes, Home Owners Association (HOA) fees, ground rents, etc.
  • Maintain homeowner’s hazard insurance policy
  • Maintain the property in a condition equal to when the loan was closed

 

Allowable Amount of Money Borrowed

The allowable amount of money borrowed varies loan to loan, and can depend on:

  • Value of home
  • Age of youngest borrower
  • Current interest rate
  • Disbursements are made in equal monthly payments or in amounts defined by the homeowner

HECM Saver Loan

Beginning October 4, 2010, homeowners seeking to obtain a FHA Home Equity Conversion Mortgage (HECM) now have the option of reducing their closing costs by selecting HECM Saver as their initial mortgage insurance premium. The HECM Saver differs from the traditional HECM Standard Program in that eligible borrowers 62 and older will be charged significantly lower upfront fees. However, the lower upfront fees do result in less money being made available to the borrower than is available under HECM Standard.
There are no additional eligibility requirements for HECM Saver; homeowners just need to meet existing HECM program requirements. HECM Saver is available for all HECM transaction types and payment plans. Additional information about HECM Saver can be obtained from a HUD-approved HECM Counselor or FHA-approved lender.

Step 1. Get Pre-Approved.

Getting pre-approved is as easy as 1-2-3!

Create an Account

Creating an account is fast, easy, secure and FREE! Your account enables you to easily modify your loan application and view the status of your loan anytime day or night.

Submit Information

When you register for a Loan Center account, you can submit a loan application online and the sensitive information that you provide will be transmitted securely.

Get Pre-Approval

Pre approval can be done in as little as an hour if you have thoroughly completed the loan application and have all the needed paperwork to support the information on the application.

You have questions? We have answers.
Call Now:
805-543-LOAN

Check out Central Coast Lending’s Blog

Market Updates, Real Estate News, and Helpful Guides