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Reverse Mortgages

  • What is a reverse mortgage?

    Available to homeowners who are 62 years of age or older, a reverse mortgage is a unique government-backed financial tool that may help you achieve your optimum lifestyle.

    • Reverse mortgages can provide a safe way to tap some of your home value. Use your home to stay at home.
    • Reverse mortgages can help seniors enjoy and share their wealth during their lifetimes.
  • What are the benefits of reverse mortgages?

    For many seniors, the home is the most valuable asset, especially in an area like San Diego. Launched in 1994 by Congress, the government-backed reverse mortgage program (Home Equity Conversion Mortgage) can provide a safe way to tap some of that home value. The funds can be drawn as needed with flexibility, are tax free, and there are no monthly payments. While some seniors use the funds to make their homes more modern or to help with the extra expenses Medicare doesn’t cover (like hearing aids or dental work), there are no restrictions on how the funds can be used.

    Seniors with adult children will experience many attractive new possibilities: helping an adult child buy a home now, contributing to educational expenses for grandchildren, or purchasing a second home near their adult children. Reverse mortgage funds may be critical to help with inflation, replace lost social security or pension income after a spouse has passed away, or when long-term care is needed.

  • How much can I get from a reverse mortgage?

    Try the National Reverse Mortgage Lenders Association’s online calculator to check whether you are qualified and for how much.

  • What should I do before selecting a reverse mortgage lender?

    Before meeting with a reverse mortgage lender or filling out an application, read “Use Your Home to Stay at Home™“.  Published by the National Council on Aging, it is the official reverse mortgage consumer booklet approved by the U. S. Department of Housing & Urban Development.

    The final step is to meet with a HUD-approved counselor. The government requires you to obtain a certificate showing that you have been counseled prior to processing your loan application. The counselor is allowed to charge up to $125 for the meeting, but the fee may be waived depending upon your situation. The HUD website provides links to approved  counseling agencies.

  • How should I select a reverse mortgage lender?

    When you’re ready to select a lender, give heavier weight to those that have experience with reverse mortgages in San Diego. The process is different than for forward mortgages, so it’s best to go with lenders familiar with the procedures.

    Find out if the lender is a member in good standing of NRMLA (National Reverse Mortgage Lender Association) or the BBB  (Better Business Bureau). These associations require members to abide by a code of ethics. See the NRMLA and BBB websites for more information.

    What is the lender’s local Better Business Bureau rating? Determine whether there are serious unresolved complaints.

    Different types of lenders (banks, savings and loans, mortgage brokers, etc.) are regulated by different government agencies. Find out which goverment agency regulates the lender and check online to find out if there are any serious unresolved complaints. You can often find this information on the company’s website. For example, the website may include the lender’s license number or an FDIC logo. If the lender is regulated by the state, use California’s handy multiple-agency license search at www.dre.ca.gov/MultipleDepartment.html.

    Check out the professionalism of the company as evidenced by its website. When was the website last updated? Does it include a license number? Does it name its government regulating agency? Does it require you to provide your contact information in order to search the website? Does it include biographical information about key executives who would be overseeing your loan? Is the contact information up to date?

    Try emailing or calling someone at the company. How long does it take for a response? Remember that salespeople tend to be more responsive before any papers are signed.

    Once you have narrowed your choice to your top three, ask for phone or in-person meetings with their most experienced HECM agents.