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Reverse Mortgages San Diego

A reverse mortgage is a type of loan available for homeowners 62 years of age and older and allows homeowners to obtain cash without having to sell their home. The only reverse mortgage insured by the United States Federal Government is called a Home Equity Conversion Mortgage (HECM), and is only available through an FHA approved lender. Reverse mortgages are secured by the acquired equity in the home- the difference between the home's value and the unpaid balance of the current mortgage. With a reverse mortgage, you don't have to make any payments. The equity in your home decreases and the interest on the reverse mortgage accumulates over time. You may continue with your reverse mortgage as long as the property remains the primary residence. Once the house is sold or is no longer the primary residence, the loan must be repaid along with any accumulated interest.

Advantages of a Reverse Mortgage

  • No regular payments are required.
  • You can convert equity into cash without selling your home.
  • You get to choose how you receive your money: lump sum, planned cash advances, or a combination of the two aforementioned.
  • You maintain ownership of your home.
  • This income does not affect any other benefits being received.

Disadvantages of a Reverse Mortgage

  • Subject to higher interest rates than most other types of mortgages.
  • Your acquired equity will decrease as the interest on the reverse mortgage accumulates.
  • Upon your death, the principal and interest must be repaid in full within a limited amount of time by your estate. The amount of time required to settle an estate can often exceed this set amount of allowed time.
  • Since the principal and interest is repaid to the lender after death, there is less money in your estate to be handed down.
  • There are many costs associated with reverse mortgages: Home appraisal fees, application fees, closing fees, repayment penalty for selling or moving within three years of obtaining the reverse mortgage, and fees for independent legal advice.

Requirements of a Reverse Mortgage

  • 62 years or older.
  • Live in your home as a primary residence.
  • Reside in a single family home, 2-4 unit owner-occupied home, town house, or approved condominium.
  • Have sufficient equity.
  • Able to pay off your existing mortgage through the reverse mortgage loan proceeds.
  • Complete a HUD (U.S. Department of Housing and Urban Development) approved counseling session.
  • Maintain your home according to FHA requirements.
  • Continue to pay property taxes and homeowners insurance.

American Financial Network, Inc. is not acting on behalf of or at the direction of the federal government, and this offer is not being made by an agency of the government.