All About Reverse Mortgages

All About Reverse Mortgages: The 10 Most Important Things to Know

Every important financial decision you make should begin with an education. A reverse mortgage is no different. You should take the time to learn everything possible so that you can make the best decision for you and your loved ones. Citizens Lending Group aims to educate citizens of California all about reverse mortgages in order to offer the best service to all of our clients.

Consider this page your primary resource to learn all about reverse mortgages and how they can help you meet your financial goals. The information here is intended as a guide. If you have specific questions, contact Citizens Lending Group directly to learn more about reverse mortgages and reverse mortgage requirements.

Learn All About Reverse Mortgages

If you have found yourself asking what is a reverse mortgage, then you have come to the right place. Consider this your first step to learning about all of the facets of the reverse mortgage process.


1. Reverse Mortgages Convert Equity into Cash

When you are learning all about reverse mortgages, the first thing to note is that reverse mortgages allow you to turn the equity you have in your home into cash. The payments you have made on your existing mortgage can be loaned back to you and you only have to repay the reverse mortgage when you move out or sell your home.


2. About Reverse Mortgages: How to Qualify

To qualify for an FHA reverse mortgage, you must be 62 years or older. You must own your home outright or have a low enough balance on your original mortgage that it can be paid in full at the closing of your reverse mortgage. You must also have the financial resources to continue paying property taxes, and you must live in the home you are putting on a reverse mortgage.


3. Qualifying for Reverse Mortgages Even if Your Original Mortgage was not FHA Insured

Your home is eligible for a reverse mortgage even if the original loan was not insured by FHA.


4. Single Family and Select Multi-Unit Homes are Eligible

One thing you are probably looking for while learning all about reverse mortgages is whether or not your home is eligible. Single family homes, homes owned and lived in by the borrower in 2-4 unit buildings, as well HUD-approved condos and manufactured homes can all be eligible for an FHA reverse mortgage.


5. All About Reverse Mortgages’ Differences from Home Equity Loans

Reverse mortgages offer many differences and benefits when compared to home equity loans. For example, with a home equity loan, you start making payments every month. A reverse mortgage only requires you to pay when you sell or move out of your home.


6. You Will Have an Estate to Leave Heirs

Your family probably wants to know all about reverse mortgages too. You can assure them that in most cases you will have an estate to leave them even after taking a reverse mortgage. When your loan period ends, you only need to pay the loan amount, interest, and fees when you sell your home. You keep the rest to pass on.


7. You Can Get up to $765,600 from the FHA for your Home

The amount you can receive for your reverse mortgage is determined by the age of the youngest borrower as well as the value of your home. You can receive up to the appraised value of the home, the $765,600 FHA limit, or the sales price of the home; whichever is lower.


8. You Do Not Need to Use an Estate Planner to Learn All About Reverse Mortgages

The FHA and Citizens Lending group are your best resources when it comes to learning all about reverse mortgages. Both Citizens Lending Group and the FHA provide information about reverse mortgages completely for free. You do not need to contact an estate planner to begin the mortgage process with Citizens Lending Group.


9. All About Reverse Mortgage Payments

There are several options you can consider when it comes to choosing the best reverse mortgage payment schedule. These include:

  • Tenured payments that provide equal monthly payments as long as at least one borrower lives and occupies your home
  • Term payments that provide equal monthly payments for a fixed period of time
  • Line of Credit payments, which provide cash in installments as needed by the borrower until the credit line is exhausted
  • Modified Tenure payments that are a combination of line of credit and scheduled monthly payments and last as long as you live in your home
  • Modified Term payments, which are a combination of line of credit and monthly payments for a certain period of time chosen by the borrower
  • Single Disbursement payments that are made only once: at the time of mortgage closing

10. You Have Three Calendar Days to Change Your Mind

One of the most important things about reverse mortgages is the ability to cancel if you change your mind. Once the loan process reaches the closing date, you have three days to rescind the offer. Your lender should explain this process when giving you all the facts about reverse mortgages that apply to your specific loan.


Contact Us to Learn All About Reverse Mortgages in California

Citizens Lending Group is your first resource when it comes to learning all about reverse mortgages in California. Contact us today to learn more about reverse mortgage requirements and if a reverse mortgage is right for you.

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Loans made or arranged pursuant to Real Estate Corporation License Endorsement #01814249, California Bureau of Real Estate. NMLS #1109984
These materials are not from HUD or FHA and were not approved by HUD or a government agency.