Learn About Reverse Mortgages

What is a Reverse Mortgage?

Facts about Reverse MortgageA reverse mortgage is a home-loan program for homeowners at least 62 years of age. It allows borrowers to access the equity they have built up in their homes. It does not require a monthly payment on the principal or interest.

With a reverse mortgage, the lender makes payments to the borrower

Traditional mortgage loans are very straightforward:

  • You qualify for a loan amount based on your credit rating and income.
  • The lender calculates your monthly payment, including interest and principal, and you pay it for the next 15-30 years!

The new program is called a reverse mortgage for a reason. Instead of making monthly payments to a lender, the lender makes payments to the borrower! Reverse mortgage proceeds can be taken as a lump sum, a line of credit and/or you can choose to no longer make your monthly mortgage payment.

The way you use your home’s equity depends on YOUR life and your needs

  • Your interest may be in reducing your monthly expenses.
  • You may want to establish a line of credit to manage potential emergencies or fulfill lifelong dreams.
  • You might be interested in using a reverse mortgage to downsize and purchase a new home.
  • Perhaps you are an adult son or daughter looking for ways to help Mom and Dad.

With a reverse mortgage, there is no mandatory monthly repayment

Borrowers are not required to pay the loan back until the home is sold or vacated. Like any loan, interest will accumulate on funds that have been borrowed. If you do not plan on making periodic payments toward your reverse mortgage, the loan balance will grow.

Learn more about helping seniors thrive in retirement

The reverse mortgage program was first enacted in 1989, during the Reagan administration. Although there have been changes to the program over the years, the mission has remained the same. To help seniors thrive in retirement, with dignity, in their own homes. Let’s review some of the ways a reverse mortgage can help you!

Frequently Asked Questions

Is this loan program insured by the government?

Yes. The reverse mortgage program is regulated by H.U.D. (U.S. Department of Housing and Urban Development) and is insured by the F.H.A. (Federal Housing Administration). These entities set the guidelines lenders must abide by.

Is the HECM the same as a reverse mortgage?

That is correct! HECM is short for: Home Equity Conversion Mortgage. It is the
same program as the federally insured reverse mortgage.

Does the bank take ownership of my home?

Absolutely not! This is merely a mortgage lien. Just like any traditional mortgage product, the title remains in your name.

Is this program only for people who are struggling financially?

Not at all. Although it helps many seniors in San Diego on fixed incomes live more comfortably, many turn to this option for additional security in retirement.

Will I be leaving my children with debt?

You do not have to! Payments can be made toward a reverse mortgage, just like any other mortgage product. This program gives the borrower much more
flexibility regarding repayment options.

If my loan becomes more valuable than my home, how are my heirs impacted?

This is a non-recourse loan. This means the home stands alone for the debt, not the homeowner or heirs. It is a concern some share when they do not plan on making any payments toward the reverse mortgage loan over a vast span of years.


Learn how much of your home equity
you can tap into today.

Reducing your living expenses?

Learn how a reverse mortgage can help reduce your monthly expenses and enjoy retirement.

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Thinking about your future?

A reverse mortgage can be a fantastic way to prepare for the uncertainties of tomorrow.

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Considering buying a home?

Purchasing your 'forever' home with a reverse mortgage does not have to break the bank.

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Helping Mom and Dad financially?

A reverse mortgage is a great way to keep Mom and Dad financially independent and secure.

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