Certified Reverse Mortgage Professional - Serving CA Reverse Mortgage Industry for 17 years. 

Over 30 years experience in the mortgage banking industry.

Reverse Mortgage Loan Description

Consider a reverse mortgage to help with wealth management, reverse mortgage proceeds are tax free.

Call Capital Funding for a description of the key elements and a complete list of the reverse mortgage programs that we offer, please contact us at 949-365-5737 .

Reverse Mortgage Loans

A Reverse Mortgage Loan, is just that, "A Loan" A Reverse Mortgage is a Home Equity Conversion Mortgage Loan, also known as a (HECM) insured by HUD. Specifically geared for homeowners 62 years of age and older, it allows you to convert part of the equity in your home into cash. Unlike traditional home equity loans that are required to be paid back, the borrower does not have to make mortgage payments! Thats right! The borrower does not have to make a monthly mortgage payment with a reverse mortgage loan. If you choose to make a payment, there will never be a penalty assessed.

Like its name indicates, this program pays the homeowner either a one-time large payout or monthly installment. Reverse mortgage loans are great options for seniors looking to increase their monthly income.

AJUSTIBLE-RATE HECM - Flexable payment options. More adaptable loan options for long-term retirement planning.

FIXED-RATE HECM - Most popular for those paying off existing mortgage debt who want the stability of a fixed rate.

  • $0 Monthly Payment Option
  • No Minimum Credit Score
  • No Minimum Reserves
  • Non-recourse loan

FIXED-RATE JUMBO (LUMP SUM) - Access equity in a high-value home.

ADJUSTABLE-RATE JUMBO (LINE of CREDIT) - Access equity in a high value home. Flexible line of credit allows for a draw period.

  • Supports home values up to $10 million
  • $4,000,000 Lending Limit
  • Lump-Sum Fixed Rate Payment Option

 For more details. Call us today!  (949) 365-5737

Eligibility For a Reverse Mortgage

To be eligible for a Home Equity Conversion Mortgage (HECM) reverse mortgage, the Federal Housing Administration (FHA) requires that all homeowners be at least age 62. The home must be owned free and clear OR all existing liens must be satisfied with proceeds from the reverse mortgage. If there is an existing mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at closing. Generally there are no credit score requirements for a reverse mortgage.

Homeowners Maintain Title

Borrowers maintain title and may remain in the home indefinitely, even if the loan balance becomes greater than the value of the home – as long as the borrower meet the loan obligations. Generally speaking, as long as at least one homeowner lives in the home as their primary residence, continues to pay required property taxes and homeowners insurance and maintains the home in accordance with FHA requirements, a reverse mortgage loan will not become due.

Estate Inheritance

In the event of death or in the event that the home ceases to be the primary residence for more than 12 months, the homeowner’s estate can choose to repay the reverse mortgage loan or put the home up for sale.

If the equity in the home is higher than the balance of the loan when the home is sold to repay the loan, the remaining equity belongs to the estate.

If the sale of the home is not enough to pay off the reverse mortgage, the lender must take a loss and request reimbursement from the FHA. No other assets are affected by a reverse mortgage. For example, investments, second homes, cars, and other valuable possessions cannot be taken from the estate to pay off the reverse mortgage.

Loan Limits

The amount that is available generally depends on four factors: age (older is better), current interest rate, appraised value of the home and government imposed lending limits.

Distribution of Money from a Reverse Mortgage

The HECM lets you choose among several options to receive the proceeds from a reverse mortgage.

  • Lump sum – a lump sum of cash at closing.
  • Tenure – equal monthly payments as long as the homeowner lives in the home.
  • Term – equal monthly payments for a fixed number of years.
  • Line of Credit – draw any amount at any time until the line of credit is exhausted.
  • Any combination of those listed above.

Difference Between a Reverse Mortgage and a Home Equity Loan

Generally a home equity loan, a second mortgage, or a home equity line of credit (HELOC) have strict requirements for income and creditworthiness. Also, with other traditional loans the homeowner must still make monthly payments to repay the loans. A reverse mortgage generally has no credit score requirements and instead of making monthly mortgage payments, the homeowner receives cash from the lender.

With a reverse mortgage the amount that can be borrowed is determined by an FHA formula that considers age, the current interest rate, and the appraised value of the home. Typically, the more valuable the home,  the higher the loan amount will be, subject to lending limits.

To summarize the key differences, with traditional loans the homeowner is still required to make monthly payments, but with a reverse mortgage the loan is typically not due as long as the homeowner lives in the home as their primary residence and continues to meet all loan obligations. With a reverse mortgage no monthly mortgage payments are required, however the homeowner is still responsible for property taxes, insurance, and maintenance.

Understand everything about a Reverse Mortgage

It is maditory for every borrower to take a (HECM) Home Equity Conversion Mortgage counseling class. The counselor is an independent third party that is there to assist you in understanding your choices. Counseling appointments are held over the telephone and are available in almost every language. Counseling is required by the Department of Housing and Urban Development (HUD).  

Can all this be True?

Reverse Mortgages are strickly governed and monitored by the federal goverment. FHA insures every loan to make sure you are protected and guarantee never oweing more than the value of your home and always having access to your proceeds.  

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