All California Mortgage

QUALITY PEOPLE ~ QUALITY SERVICE

Since 1992, All California Mortgage has provided quality service in every area of mortgage lending. From purchase to refinance to construction and commercial lending, we have access to a full range of mortgage sources. Our lending specialists are dedicated to finding you the right loan-with great rates, terms and costs to meet your unique needs. 

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© 2017 All California Mortgage, a division of American Pacific Mortgage Corporation  NMLS #1850 / BRE #01215943
17 E. Sir Francis Drake Blvd., Suite 200, Larkspur, CA 94939     (800) 371-4545   inquire@allcalifornia.com 
Licensed by the Department of Business Oversight under the CRMA     Disclaimer  |  Privacy Policy 

What is a Reverse Mortgage and  how does it work?  

A Reverse Mortgage is a home loan (used for any purpose) where seniors, 62 and older, can access the equity (cash) built up in their home. It can also be utilized to purchase a home should you desire to be free of having to make a monthly mortgage payment.  

It is called a Reverse Mortgage because although you borrow money from a lender, the lender makes monthly payments to you, rather than you making monthly payments to the lender, or they provide you with a lump sum either in cash or accessed when you want through a credit line. Funds can be used to pay off existing debt or as you see fit. All interest is paid at the end of the loan, rather than in the beginning.


Some of the Benefits of a Reverse Mortgage:

  • Strengthen your personal and financial independence.
  • Help pay for health care or other family needs, retire early, defer social security to maximize payments, purchase a home without monthly payments, or simply travel the world, etc.!
  • You retain title to your home and you can never lose your home in foreclosure as long as you maintain the property tax and insurance payments.
  • The loan is only retired when the last surviving borrower passes, when the house is sold by you or your heirs, all borrowers move out of the house, or through a refinance.
  • You retain your Medicare and Social Security benefits.
  • Obtain your funds via a growing credit line, a lump sum distribution, a monthly payment guaranteed for life, a monthly payment that you determine for a specific term or a combination of all these options.
  • All funds are tax free.
  • In most cases there are no income or credit requirements. Qualification is based on the age of the youngest borrower (or non-borrowing spouse if applicable), the value of your home and the prevailing interest rate.
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Reverse Mortgage Specialists 
Since 1986

When considering the option of a reverse mortgage, it is often a decision that is shared and discussed within the family. Reverse mortgages are able to give family members the ability to retain financial independence, by accessing the wealth they have in their homes, while allowing them to live comfortably in their own homes on their own terms.

View our Reverse Mortgage Brochure for more information:

Reverse Mortgage FAQs:

How does a reverse mortgage differ from a home equity loan?

Both a reverse mortgage and a home equity loan use the equity you have built up in your home to provide you with readily available cash. They differ in that with a home equity loan you must make regular monthly payments of interest and/or principal. However, with a reverse mortgage you do not make any monthly mortgage payments for as long as you stay in the home.

Does my current income influence my ability to obtain a reverse mortgage?

No. Since reverse mortgage borrowers need not make monthly repayments, there are no income qualifications in most cases.

What are the advantages of a reverse mortgage?

Remain independent. A reverse mortgage allows you to remain in your home and retain home ownership. No monthly mortgage payments. You are not required to pay back the reverse mortgage loan nor make any monthly mortgage payments until you permanently move out of the home.

Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free* and will not affect your Social Security or Medicare benefits.

Freedom and flexibility. The money you acquire from a reverse mortgage is yours to use in any way you choose.

* Consult your tax advisor

I've heard that with a reverse mortgage the lender would eventually own my home. Is this true?

It is absolutely false. The borrower(s) retains title to the property. The reverse mortgage lender is merely extending a loan to the borrower.

Because the homeowners retain title, they remain responsible for the payment of property taxes, insurance, utilities, home maintenance, and other expenses - just as they would with a standard first mortgage or home equity loan.

Can I refinance a reverse mortgage as I would be able to do with a traditional home mortgage?

Yes. Refinancing can make sense if your home increases in value or interest rates drop.

Is it possible for my loan balance to become greater than the value of my home?

No. You can never owe more than what your home is worth. What's more, since the reverse mortgage is what is known as a "non-recourse" loan, the lender cannot seek repayment from your income, your other assets or your estate. In other words, the debt is secured by the property only.

Can a reverse mortgage lender take my home away if I outlive the loan?

No they cannot. And the loan is not due at that time either. In fact, you don't need to repay the loan as long as you or another borrower continues to live in the house, keep the taxes paid and insurance in force.

What is the maximum amount of cash that I can obtain?

The amount you can borrow depends on several factors, including your age, the type of reverse mortgage you select, current interest rates, the location of your home, the appraised value of your home and FHA's lending limits for your area. The older you are the more valuable your home is and the less you owe on it, the more money you will be able to obtain.

How can I use the money I get from a reverse mortgage and are there restrictions?

You can use the money for anything you choose, from daily living expenses, home improvement costs, healthcare expenses, paying off existing debts, helping out loved ones or simply enhancing your retirement years - there are no restrictions. For many people, the money provides a "financial security blanket," in case unexpected expenses arise.

What are my choices in how I receive the money from a reverse mortgage?

With most reverse mortgages you have a wide range of payment options, one of which should be ideal to meet your financial needs:

  • You can choose to receive the money all at once, as a lump sum.
  • You can receive equal monthly payments as long as one of the borrowers continues to occupy the property as a principal residence.
  • You can choose to receive equal monthly payments for a fixed period of months.
  • You can obtain a line of credit; which allows you to access funds at times and in amounts of your choosing until the line of credit is exhausted. This is a popular option if you do need funds immediately.
  • You can opt for a combination of a line of credit while also receiving regular monthly payments for as long as the borrower remains in the home.
  • Or, finally, you can choose a combination of the above.

Who can qualify for a reverse mortgage and answers to common questions regarding requirements and restrictions?

Seniors 62 years of age or older qualify. There are no income, health or credit qualifications.

Can I obtain a reverse mortgage if I still owe money on a first or second mortgage?

Yes. You may be eligible for a reverse mortgage even if you still owe money on a first or second mortgage. The funds you would receive from the reverse mortgage would first be used to pay off any existing mortgages you have on the property.

What types of homes are eligible for a reverse mortgage?

First and foremost, the reverse mortgage must be on the borrower(s) primary residence, that is, where they live most of the year (typically six months or more). Most reverse mortgages are taken out on single family, one-unit homes. Most programs also accept two-to-four unit buildings in which one unit is owner occupied by the borrower, condominiums and manufactured homes built after June 1976. Mobile homes and cooperatives are generally not eligible for a reverse mortgage. Your All California Mortgage, Inc. loan agent will help you determine if your home is eligible.

Is a home that is held in a "living trust" eligible for a reverse mortgage?

Yes. In most cases a homeowner who has placed his or her home in a living trust can take out a reverse mortgage. A review of the trust documents would be performed by the reverse mortgage lender to determine if anything in the living trust documents is unacceptable.

What kinds of reverse mortgages are available? Are all reverse mortgages the same?

No, actually there are two basic types of reverse mortgages:

  • Federally-insured reverse mortgages. Known as Home Equity Conversion Mortgages (HECM), they are insured by the U.S. Department of Housing and Urban Development (HUD). They are widely available, have no income requirements, and can be used for any purpose.
  • Proprietary reverse mortgages. These mortgages are held by the companies that offer them and are typically used to facilitate higher loan amounts than offered through FHA HECM's

When must a reverse mortgage loan be repaid?

Your reverse mortgage loan becomes due and must be paid in full when one or more of the following conditions occurs:

  • the last surviving borrower passes away or sells the home
  • all borrowers permanently move out of the home
  • the last surviving borrower fails to live in the home for greater than 12 consecutive months (up to 12 months absence is allowed for health care rehabilitation needs)
  • you fail to bring current property taxes or insurance
  • you let the property deteriorate beyond what is considered reasonable wear and tear and do not correct the problems.

What is owed when a reverse mortgage loan is repaid?

When the last surviving borrower permanently moves out of the home or passes away, the reverse mortgage loan becomes due. The reverse mortgage principal, interest charges and service fees (such as closing cost fees) are paid from the sale or refinance of the house.

How will a reverse mortgage affect my estate?

When you sell your home or no longer use it for your primary residence, you or your estate must repay the lender for the cash received from the reverse mortgage, plus interest and service fees. Any remaining equity belongs to you or your heirs. It's important to remember that you can never owe more than the home's appraised value when it is sold. None of your other assets will be affected by your reverse mortgage loan.

Must the heir or the last surviving borrower sell the property to repay the reverse mortgage loan?

No. Repayment may be accomplished by refinancing the reverse mortgage with a traditional "forward" mortgage loan, or through the use of other assets.

What are the costs and fees incurred when obtaining a reverse mortgage?

Most reverse mortgages have an application fee (which may cover the cost of a credit report and an appraisal), an origination fee, typical closing costs, insurance fees and a monthly servicing fee. These charges can be paid from the reverse mortgage itself, making them no immediate burden to the borrowers; the costs are added to the principal and paid at the end, when the loan becomes due. However, there are now reverse mortgage products that charge greatly reduced fees including no upfront Mortgage Insurance Premiums and/or no origination fees.

How much cash will I have to come up with upfront to cover origination fees and other closing costs?

One of the major benefits of a reverse mortgage is that you can use the money you obtain from your home's equity (dependent upon final calculations) to pay for the various fees that are part of the overall cost of the loan. The costs are simply added to your loan balance. You pay them back, plus interest, when the loan becomes due - that is, when the last surviving borrower permanently moves out of the home or passes away.

Are reverse mortgage interest rates fixed or variable?

Reverse mortgages can either be fixed or have a variable rate that is tied to a financial index that will vary according to market conditions.

What is "TALC" and why should I know about it?

TALC is short for "Total Annual Loan Cost." It combines all of the costs of a reverse mortgage into a single annual average rate. It can be very useful when comparing one type of reverse mortgage to another. Reverse mortgages vary considerably in features, benefits, and costs. It's not really an "apples to apples" comparison. If you are considering a reverse mortgage, be sure to ask your All California Reverse Mortgage specialist or counselor to explain the TALC rates for the various reverse mortgage products.

Are there tax consequences? What about my Social Security and Medicare benefits?

Because reverse mortgages are considered loan advances and not income, the IRS considers the proceeds received by them to be non-taxable. Similarly, having a reverse mortgage should not affect your Social Security or Medicare benefits. Please contact your tax advisor to assess your particular situation. If you receive SSI, Medicaid, or other public assistance, your reverse mortgage loan advances are only counted as "liquid assets" if you keep them in an account past the end of the calendar month in which you receive them. You must be careful not to let your total liquid assets become greater than these programs allow. You should discuss the impact of a reverse mortgage on federal, state or local assistance programs with a professional advisor, such as your local Area Agency on Aging, your accountant or tax attorney. Finally, another tax fact to bear in mind is that the interest on reverse mortgages is not deductible on your income tax returns until the loan is paid off entirely…in other words until the interest is actually “paid”.

Is it true that I must meet with an unbiased counselor before completing my reverse mortgage application?

Yes. This is a federally mandated feature of the reverse mortgage process and is designed for your protection. Your All California Mortgage Reverse Mortgage specialist will advise you on how to get in contact with an independent government approved counselor.

Is it possible to purchase a home with a Reverse Mortgage?

Yes most definitely, however it must be your primary residence. Eligible property types include: single family homes, 1-4 Unit properties, some manufactured homes, condominiums and townhouses. Newly constructed properties must have a certificate of occupancy before a loan application can be taken. For more specific information, please contact your local All California Reverse Mortgage Specialist.


© 2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions apply.

  ©  2017  All California Mortgage
a division of American Pacific Mortgage Corporation - NMLS #1850 / BRE #01215943
17
E. Sir Francis Drake Blvd., Suite 200, Larkspur, CA 94939     (800) 371-4545      inquire@allcalifornia.com
Licensed by the Department of Business Oversight under the California Residential Mortgage Act     Disclaimer  |  Privacy Policy