How to get a Reverse Mortgage

We are kicking off a week talking about how to get a reverse mortgage, the first post of the week. This first post is one of series of senior related posts for CostaMesaRealEstate.com, and will look at all of the good things you get by being old! No, we’re not talking about arthritis, or any of those annoying things as you get older, we’ll keep it to some of the benefits you get from Orange County and Costa Mesa programs that can help our seniors in our local area.

We can even call it Senior Week here in Costa Mesa! That’ll take you back to how you felt your last week in high school, huh?

Let’s kick it off with some of the financial programs that are available this week, and then we will delve into the county’s benefits later this week. First off, have you heard of a mortgage product called a reverse mortgage? They aren’t that common in Costa Mesa, but it is a program that should certainly be looked at by certain seniors in our community for a variety of reasons. Mind you it is not for everyone, but in certain circumstances it has great utility.

The purpose of a reverse mortgage is to provide an additional source of funds for a senior citizen (defined as 62 or older) from a Costa Mesa real estate holding, while at the same time eliminating any out of monthly pocket mortgage expenses. Additionally, the reverse mortgage will allow the holder/owner to stay in the house as long as they want to (they can pass away, or outlive the term of the mortgage), there is no change in title (bank not on title), there is no equity sharing in a rising market, and better yet, a buyer in may actually purchase a home by using a reverse mortgage product like my client did recently on 1062 Redding Ave.

The real purpose as a senior is that you are getting funds paid to you by the bank each month, which can makeup for a gap in Social Security or retirement earnings. Imagine it like an equity line that slowly pays you consistently over time. It is really a financial solution when someone has little retirement savings but has considerable equity in a home.

 

Our buyer purchased this Costa Mesa home with a reverse mortgage recently.

Wouldn’t we all like to qualify where the bank actually pays us every month on our mortgage? Here are the requirements:

• All owners on title must be 62 years or older
• Condos must be FHA approved (see our list for Costa Mesa)
• Homes must meet FHA minimum property requirements and standards (Health & Safety issues)
• Any existing debt on existing home must be paid off prior to obtaining a new reverse mortgage
• Borrower must not be currently delinquent on any federal debt (can be paid off with new reverse mortgage loan)
• Borrower must attend counseling/education prior to obtaining mortgage and receive a certificate of completion

That list isn’t too bad, is it? Actually it is pretty straightforward and a good way to add an additional income stream if you are out of other options. There are of course some other details that come with the reverse mortgage, but I have given you the most important details to get you started.

Need help with your Costa Mesa real estate questions? Broker Colin Delaney is always happy to help at (714) 743-9882 or e-mail me.