Different types of Reverse Mortgages
Reverse mortgages enable homeowners aged 62 or older to convert part of their home equity into cash without monthly mortgage payments. There are three primary types, each suited to different financial needs and circumstances:
Home Equity Conversion Mortgage (HECM)
- Insured by the Federal Housing Administration (FHA): Provides government-backed protection.
- Mandatory Counseling: Requires a session with a HUD-approved counselor to ensure understanding of the loan terms.
- Eligibility: Must meet FHA requirements, including maintaining the home as a primary residence and keeping up with property taxes and insurance.
- Costs: Includes origination fee, mortgage insurance premiums, and closing costs.
Proprietary Reverse Mortgage
- Private Lenders: Not insured by the FHA.
- Higher Loan Limits: Suitable for homeowners with higher-value properties.
- Eligibility: Varies by lender; may include higher credit score requirements and property value thresholds.
- Costs: May have higher interest rates and fees compared to HECMs.
- Age requirements are lower, aged 55 or older in some states
Single-Purpose Reverse Mortgage
- Offered by Government or Nonprofit Organizations: Typically, available through state or local agencies.
- Specific Use: Proceeds must be used for a single, lender-approved purpose, such as home repairs or property taxes.
- Lower Costs: Often the least expensive option due to backing by government or nonprofit entities.
- Eligibility: May have income or asset limits and are not available in all areas.
Our reverse mortgage advice extends to markets beyond San Diego, serving nearly half the United States — including Oceanside, Carlsbad, Fallbrook, and other parts of San Diego County. A reverse home mortgage is an amazing financial tool that can provide life-changing benefits to its users. It uniquely offers access to home equity while allowing the homeowner to remain in their home for the rest of their life.
To qualify, the homeowner must be 55 years or older and live in the home as their primary residence. For those in Southern California, a reverse mortgage in Carlsbad or a reverse mortgage in Oceanside can be a smart way to unlock home equity while maintaining financial flexibility. Whether you’re in San Diego County or one of the many other areas we serve, our team can guide you through the process with expertise and care.
Schedule your free consultation today and experience the financial freedom in your golden years!
