A Reverse Mortgage is a special type of loan that enables
senior homeowner 62 years or older, to convert a portion of their home equity into cash. Proceeds can be in the form of a lump sum, a line-of-credit, or a monthly income. The
homeowner does not make monthly payments and any borrowed funds are not repaid until the home is sold, vacated or upon
the passing of the last surviving borrower.
Title to the property remains in the name of the homeowner.
There are three types of Reverse Mortgages.
HECM (Home Equity Conversion Mortgage)
This program is the most popular and is backed by the U.S. Department of Housing and Urban Development
(HUD) and insured by FHA. The current maximum lending limits range from
$200,160 to $362,790 depending upon the County in which the home is located.
This program is backed by Fannie Mae and offers a higher lending limit, which is
$417,000 regardless of where the home is located. This program can be used as a down payment when buying a home but only if the borrower pays the difference in cash between the reverse mortgage proceeds and the price of the home during escrow.
PROPRIETARY
REVERSE MORTGAGE
This type of reverse mortgage is provided by various Lenders and takes
into consideration the entire appraised value of the house. The fees are lower
but the interest rate is higher than the FHA program. The distinct advantage is
a borrower may be eligible to receive a greater amount of funds over the FHA
plan. Reverse Mortgages of California offers you such plans from several
Lenders.
CA Dept. of Real
Estate, Real Estate Broker Lic # 01346804
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2002 - 2007 Reverse Mortgages of California Inc. All rights reserved.
HECM (Home Equity Conversion Mortgage)
