Reverse Mortgage Information

Reverse Mortgage Information: Be Informed

A reverse mortgage can be very simply defined as money derived from the equity of a home that can be used for other purposes. While this basic reverse mortgage definition is accurate as far as it goes, there are some elements that separate this process from other equity loans, and there is much more to reverse mortgage information.

Reverse mortgages can be an important tool to help seniors when it comes to planning for their financial future.

Contact us today to learn more about reverse mortgage requirements and to find out if a reverse mortgage is right for you!


Reverse Mortgage Information: Two Main Types

For general reverse mortgage information purposes, there are two types of reverse mortgages that fall in this category.

Home Equity Conversion Mortgage (HECM)

A Home Equity Conversion Mortgage (HECM) is insured by the FHA. This is the most common type of reverse mortgage in the United States. Homeowners who borrow through an HECM can choose to receive a line of credit, a single, lump sum, or payments on a monthly basis. Money from this type of mortgage can be used at the owner’s discretion.

The key reverse mortgage information points here are:

  • Homeowner applicant must be 62 years of age (as long as one spouse is 62 or older the other can be younger than 62 and still qualify).
  • The borrower must continue to pay insurance, property taxes, and maintenance costs.
  • Proceeds from this type of mortgage are often used to provide more comfortable retirement years, adding to retirement income.
  • Payments on this type of loan need not be paid until the borrower moves from the home or passes away.
  • The borrower will usually not have to repay an amount above the value of the house, even as the interest on the loan compounds.
  • Borrowers are required to participate in a reverse mortgage counseling session given by an independent HUD approved counselor.

Proprietary Reverse Mortgage

The other major category is the Proprietary Reverse Mortgage (PRM). Two things stand out with this type of agreement. It is not insured by the FHA. These mortgages are instead insured by the private mortgage companies that offer them. Additionally, the guidelines placed on HECM loans do not apply to these reverse mortgages, although in most instances, the same standards are followed as best practice. This type of mortgage is often used for homes with high value and they are often referred to as Jumbo Reverse Mortgages.

Reverse Mortgage Information: Qualifying for a Reverse Mortgage

The topic of reverse mortgage loans has come up in conversation much more often in recent years thanks to a growing popularity of these types of loans. Homeowners often hear about the process and think that it sounds like something they might want to try. But who qualifies and who does not?

The most basic qualification for a reverse mortgage is age. The borrower must be at least 62 years old. Additionally, the home must be owned by the resident and must be the primary residence. Generally, income qualifications and credit checks apply to the reverse mortgage as well, but the primary goal with these is to make sure that an individual will be able to maintain their home and pay property taxes throughout the life of the loan.

The best way to understand if this type of mortgage will work in a specific situation, aside from studying the available reverse mortgage info, is to talk with a knowledgeable professional.

Benefits of a Reverse Mortgage

One other question that should be asked during the reverse mortgage information process is: What benefits does the homeowner get?

While each situation is unique and each homeowner has needs and wants that are different from the next person, there are some general benefits that can apply to everyone.

Extra cash from this type of mortgage enhances retirement in general. It may be a way to obtain funds for larger expenses or cover unexpected costs of retirement without paying extremely high interest. A reverse mortgage may allow the homeowner to settle tax obligations. Some property owners use the proceeds to help relatives with their expenses. Ultimately, how you use your money from a reverse mortgage loan will be up to you, but talking with a reverse mortgage loan officer can help you determine the best plan for your financial future.

Learn More Reverse Mortgage Information

There is a lot of reverse mortgage information out there, and we want to make sure you get it from a trustworthy source. Contact a specialist today at Citizens Lending Group for more reverse mortgage information or read more about reverse mortgages at the links below.

  • Reverse Mortgage Information: Learn more facts about what a reverse mortgage is, the requirements, qualifications, and benefits of a reverse mortgage, and other important basics about reverse mortgages.
  • Reverse Mortgage Planning Guides: Find tools, information, and guides to help you determine if a reverse mortgage is right for you and how you can use a reverse mortgage as a crucial tool for your retirement planning.
  • Family Resources for Reverse Mortgages: Reverse mortgage decisions should be a family process. Here you can find information for family members, children, and heirs of those considering reverse mortgages to help you understand the facts and implications that a reverse mortgage loan will have on your family.

Learn More About California Reverse Mortgages

These are just some of the basics. If you would like to learn more about reverse mortgage requirements and if a reverse mortgage is right for you, we invite you to contact us today.

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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.