Mortgage Resources

Featured Tools

Loan Info

Company Info

Reverse Mortgages

Local Resources

REVERSE MORTGAGES

Santa Cruz Home Finance – Your Local HUD Approved Lender and source for  Reverse Mortgages

 

The Reverse Mortgage is gaining popularity as our baby boomers age.  Reverse mortgages can be used for the purchase of a home or a refinance and have extraordinary benefits.  Imagine owning a home with no mortgage payment!  In addition to no payments, the reverse mortgage allows the homeowner to access their equity as they need it.

 

In order to qualify for a reverse mortgage, all borrowers on title to the property must be 62 years of age or older, the home must be the primary residence and can be a 1 – 4 units.  Condominiums, PUD’S and manufactured homes (built after 1976) are eligible.  The borrower is also required to participate in counseling with a HUD approved counseling agency.

 

A Home Equity Conversion Mortgage (HECM) is simply a federally insured reverse mortgage and is the primary reverse mortgage available. The maximum loan amount for a reverse mortgage is currently $625,500.   The actual terms of the loan are dependent on the borrower’s age, value & location of the home.  Reverse Mortgages are an excellent tool for some senior homeowners or home buyers.   This program provides the opportunity for a senior homeowner to stay in their home with no mortgage payment.  In addition to no mortgage payment, seniors may access their equity and use it any way they chose.  Equity can be accessed by  1) receiving an upfront lump sum payment  2) establishing a line of credit that can be used when needed   3) fixed monthly payments can be arranged for as long as you remain in your home or  4) a combination of monthly payments and line of credit. The home equity is considered the borrowers own money and there is no tax on funds used.  There is no restriction on how the equity can be used.

 

Some seniors simply do not want to be tied to a mortgage payment and that benefit alone is all that is needed.  The loan, together with the accrued interest, will have to be paid in full with the homeowner dies or when they no longer occupy the house. 

 

A common misconception with this program is that the homeowner is turning their home to the bank.  This is not true – the home owner is the only person on title to the property.  They do not make payments but they are responsible for paying their own property taxes and insurance.  In addition, the borrower will never owe more than the value of the home and there are no prepayment penalties.