A Reverse Mortgage does not affect Social Security Retirement or Medicare benefits. If a borrower participates in other government sponsored benefit programs such as SSI or Medi-Cal the borrower needs to explore the rules of that program with their advisors as it may affect these and other government program

Using Home Equity

Senior homeowners use Reverse Mortgage loans for many different reasons.  The fundamental desire of most is to remain in their home. The Reverse Mortgage loan converts a portion of the equity of their home to available cash and may be used however they wish after payoff of any mortgage and/or liens on the property.  Some common uses of the funds are to provide in-home medical or non-medical care, supplement retirement income, pay off an existing mortgage and credit card debt, home repairs and modifications, travel, create a cash reserve for emergencies, and to help family members.

Reverse Mortgage Plans.

– The FHA/HUD Home Equity Conversion Mortgage (HECM) is designed and regulated by HUD and is insured by FHA. Based upon HUD’s formula, a lender will lend a portion of the borrower’s home value based on their current lending limits. The interest rate is either adjustable or fixed.

– Jumbo Reverse Mortgages are sometimes offered by various lenders and are designed with higher value properties in mind and are not government insured. These loans allow borrowers much higher borrowing limits. The interest rate may be either fixed or variable.

The Process.

A Reverse Mortgage Loan Specialist will explain the mortgages and assist the homeowner and their advisors in all aspects of their Reverse Mortgage selection and application.  An FHA approved independent counselor will also review the Reverse Mortgage concept with the homeowner.  During the application process there will be a full, independent appraisal of the property. A termite inspection may be required.  Trusts, POAs, Conservatorships,  vesting and insurance will be reviewed.  Any mortgage or lien balances will be verified for payoff.  After reviewing these items and other details, the Loan Specialist will advise the homeowner of the results, any requirements, and the specific amount that can be funded.  Upon loan approval, the loan documents are prepared, signed, and the loan will close, record, and fund.  The loan is then transferred to a servicing center.  The borrower(s) will receive a monthly loan statement of activity and charges and any loan disbursements.