One of the things we hear most from potential borrowers is that they want to know if we are local. This makes sense because getting a Carnelian Bay reverse mortgage is a big financial decision. We offer to drive and meet with our clients face to face or meet in one of our offices.
If you are looking for a local reverse mortgage expert, we are who you need to call. Reverse mortgages are all we do, unlike some other companies that offer all types of mortgage. Those other companies are not specialists. Being a specialist is crucial to ensure your loan is structured properly to meet your financial needs now and into the future.
Choosing a Carnelian Bay Reverse Mortgage Lender
There are several reverse mortgage companies Carnelian Bay California in to pick from. Here are your options that you may be able to choose from. Choose wisely as not all reverse mortgage lenders in Carnelian Bay are the same.
- Direct Lender – This is by far the best choice out of all your options. The reason for this is simple, these are lenders that specialize in reverse mortgages. A company that specializes in this product is the best choice because it is all they do. In other words, they are truly specialists.
- Mortgage Brokers – Mortgage brokers use several different wholesale reverse mortgage lenders and can shop your home loan around to find the best rate and fee. The reality is that there is very little difference between one wholesale lender and the next in their interest rates and fees.
- Banks – There may be a couple retail banks that offers reverse mortgage loans in Carnelian Bay. However, most banks do not offer this loan option. Wells Fargo, Bank of America were the two biggest banks that provided reverse mortgages in California, but they quit providing them several years ago. We would recommend speaking with your local bank manager or a loan officer at your bank and see who they could refer you to that does offer these loans.
- Credit Unions – This is virtually the same as banks. There are very few credit unions that offer reverse home loans. If you do happen to find a credit union in Carnelian Bay that does offer these loans, be careful. Many credit unions outsource their loans to other mortgage companies.
We highly recommend only working with a loan officer in Carnelian Bay that specializes solely in the origination of reverse mortgage home loans. By working with a specialist, you are more likely to get the right type of reverse loan and to have it structured in the right way.
The Most Common Reason Seniors Choose This Loan
The most common reason to get a reverse loan is to increase cash flow. Cash flow can be increased in two different way.
Pay Off Current Mortgage and Debt
A reverse mortgage increases cash flow by paying off a current mortgage and debt because it does not require a monthly payment. Can you imagine what life would be like if you did not have a mortgage payment, credit card payments, medical bills or car payment?
Receive Tax Free Cash
A Carnelian Bay reverse mortgage could be structured to receive monthly payments every month for as long as the homeowner lives in their home or for a specific period of time. A line of credit can also be established for the homeowner to pull funds from at any give time.
As with any mortgage, property taxes, homeowner’s insurance, HOA dues (if applicable) and other property charges must continue to be made. Maintenance of the home is also required.
Getting A Reverse Mortgage in Carnelian Bay CA Means Tax-Free Cash
Convert a percentage of your home equity into tax-free funds which can be used for virtually any purpose, which include:
- Paying for home repairs and upgrades
- Getting rid of an existing mortgage loan
- Paying for real estate taxes
- Covering medical expenses or prescription medication costs
- Managing day-to-day bills
- Taking vacations
- Being able to make specific purchases
- Pull less funds from retirement accounts
- Visit family more often
- Pay for car repairs
- Replace old appliances
- Make your home more energy efficient to lower utility bills
- Give to your favorite charity or your church
What You Need to Know About Getting A Reverse Mortgage in Carnelian Bay California
- You retain title. A Reverse Mortgage enables you to keep ownership and stay in your home while taking advantage of the equity you have built.
- No monthly home loan payments required. However, you will still need to pay property taxes, homeowner’s insurance and other property charges.
- Flexibility to get cash the way you want. You may get cash in a lump sum payment, in monthly installments, as a credit line which you can pull from when or if you need it or a combination of those options.
- Straightforward qualifying. There are cash flow and credit standing requirements needed.
- Government insurance. Most Reverse Mortgages in Carnelian Bay are insured and regulated by the Federal Housing Administration (FHA). They are known as Home Equity Conversion Mortgages (HECM’s).
- Built in consumer protection. All of the FHA insured Reverse Mortgages offered today include features that keep you and your family from owing more than the appraised value of the home – regardless if your property drops in value.
- Absolutely no impact on Social Security along with other benefits. Reverse Mortgages won’t affect your Social Security, Medicare, retirement benefits or any other investments.
Just imagine residing in your house monthly mortgage payment free or enjoying a tax-free funds for life benefiting from the years you have invested in your home. A reverse mortgage is a distinct tool developed for seniors sixty 62 and older. You enjoy having access to a portion of the equity in your home along with the independence and comfort of your house you’ve lived in countless years. It is your home, it’s easy to let it work for you.
Reverse mortgage borrowers in California continue to keep possession and title on their home. It is yours just as it was before, however now you’ll be able to take advantage of the equity that’s been increasing in your property for years. Additionally, HECM reverse home mortgages provide you with the confidence of a government guaranteed FHA protected home loan in which you will not ever owe more than the property is valued at. You can obtain a reverse mortgage on the primary residence and no payment is due until the final borrower passes away or permanently leaves the property.
As a protection, anyone looking for a reverse mortgage in Carnelian Bay are required to get HUD counseling from an impartial 3rd party) prior to incurring any costs associated with the loan. Although proceeds from the reverse mortgage are tax-free, consumers really should seek tax guidance on how funds might affect government needs-based services like Medicaid.
The HECM Facts
– A Reverse mortgage home loan is a special loan product for Carnelian Bay seniors 62 and older
– A reverse mortgage allows for senior citizens to gain access to a portion of the equity inside their property.
– Borrowers hold title and ownership of their house.
– Proceeds through a reverse mortgage are tax free but borrowers will need to obtain tax advice on how proceeds may affect government need based programs such as Medicaid and SNAP.
– It’s not a government grant, but a loan that is repaid sometime in the future in the event the last borrower dies or permanently departs their property
– A reverse mortgage is eligible only for the borrower’s primary house
– HUD counseling (from an impartial 3rd party) is needed before the borrower taking on any expenses associated with the loan
Benefits of a Carnelian Bay Reverse Mortgage:
Reverse mortgages in deliver several advantages for the Carnelian Bay senior borrower. Here is a short list of the pros and cons:
- Tax free proceeds do not affect Social Security or Medicare insurance
- Frees up an illiquid resource (home equity)
- Could enable senior to buy a new house without a monthly mortgage payment
- Can provide you with a source of financial resources while the borrower allows their investments to recoup from financial market losses
- Enhances a senior’s everyday life or makes it possible to live out their hopes and dreams
- Pays off current home loan, many times liberating hundreds or thousands in monthly obligations or preventing foreclosure. Eliminate monthly home loan payments
- Enables the senior to help maintain their independence while staying in their own home
- Provides funds for in home health care or medical related costs
Negatives of a Reverse Mortgage in Carnelian Bay California:
- Spends part of the equity that could be passed on to the estate or heirs
- Growing mortgage balance, decreased equity over time
- May affect qualifications for need based programs such as Medicaid
- For the people itemizing tax deductions, a reverse mortgage removes the write off for home loan interest since no interest is paid
- Settlement costs and mortgage insurance are expensive this means the borrowers should intend on residing in the property for many years to lessen overall costs
As the population in Carnelian Bay continues to grow older and life expectancy increase, more people are going to be living longer in retirement and without a doubt will need additional sources of income. Potential borrowers need to weigh the pros and cons of this loan product for their particular financial situation
Knowledge is power. Read up on reverse mortgages before consulting with a loan officer in Carnelian Bay. This will not only save you time but could get you a far better deal.
We realize that a reverse mortgage may not be ideal for you. We encourage you to explore your options. If, as an example, you wish to remodel your kitchen, a different type of single purpose loan might be more effective. However, if, a reverse loan would most likely suit your needs, we encourage you to give us a call. A skilled loan reverse mortgage loan officer in our Carnelian Bay branch will walk you through each step of the process and answer all questions you may have. To get a greater understanding of how we approach our clients and also how we operate as a business.
We highly recommend working with somebody that specializes solely in reverse mortgages. There are several loan officers and reverse mortgage lenders in Carnelian Bay to help you with a reverse mortgage. You need to work with someone who really understands not only the product but the most beneficial strategy to structure it to meet your needs both now as well as in the future.
Types of Homes That Qualify for Carnelian Bay Reverse Mortgage Loan
1 to 4 Family Homes – These are your standard single-family homes or town homes. This also includes multi-unit properties such as a duplex, triplex or fourplex.
Manufactured Homes – You can get a loan on a manufactured home as long as you also own the land. In other words, you cannot get a reverse mortgage on a mobile home in a park where you lease the space. The home will need to have been built on June of 1976 or newer, meet HUD’s manufacturing guidelines and have HUD tags. It will also need to be a double wide or larger home.
Condominiums – In order to get a loan on a condo it must be in an approved condo complex. If it is not approved, it is possible to go through the steps of getting it approved. Many lenders will help the HOA association with this process at no cost.
Unique Property – There are certain types of homes that may or may not qualify for a loan. These homes include geodesic dome homes, berm homes, straw bale homes, log homes and A frame homes. In order to qualify, the appraiser must find recently sold comparable homes. If there are no other recent sales of similar homes, it is unlikely the home will be eligible for a reverse mortgage.
Homes that Will Not Qualify – There are certain types of homes that will not qualify for this type of home loan. These types of homes include Bed and Breakfast, foster care, farms and homes used for business purposes where the home is used for more than 50% of the business.
Don’t forget – we also serve client in these cities:
Resources for Locating Local Lenders
- HUD Approved Reverse Mortgage Companies in Carnelian Bay California- HUD (Us Department of Housing and Urban Development) maintains a list of recognized FHA lenders in Carnelian Bay. You will find the list and find a lender at HUD’s list of Reverse Mortgage lenders.
- NRMLA Reverse Mortgage Members – NRMLA (National Reverse Mortgage Lenders Association) also maintains a list of lenders and companies in Carnelian Bay. Find a locally approved reverse mortgage lender. We would highly recommend working with a lender who has their CRMP certification. The CRMP professional certification is awarded to an individual who has proven top-quality knowledge and competency in the area of reverse loans and dedication to maintaining the highest ethical and professional specifications.
Interest Rate Options
Not only can interest rates for a reverse mortgage vary from bank to bank. Rates will fluctuate depending on type of loan you choose to utilize. Here’s a basic guideline on looking for the best interest rate.
|Fixed Rate||Annual Adjustable Rate||Monthly Adjustable Rate|
|This usually will have the highest interest rate of all the options available for you. However, it comes with the least amount of risk as you will know exactly how much you will owe on the HECM at any time in the future. The downside to the fixed interest rate is that you are limited to the amount of equity you can gain access too. Plus the loan options with this rate are very limited. Typically, the fixed rate loan is commonly used when the reverse mortgage will be utilized to buy a home or there's little or no equity available after paying off existing liens against the property. With the fixed rate solution, you receive a lump sum of cash and that's it.||The loan option and interest usually come with the lowest rate. However, it is an adjustable rate. Virtually all annual reverse mortgage ARM's may change only once per year and are capped at a maximum adjustment of 2% down or up. There is also a cap rate of 5% above the start rate, this is the maximum the interest rate may change. For instance, if the start rate was 4% the highest it could possibly ever go would be 9%.||This rate choice can be all over the board. It could be lower, identical or higher than the fixed rate and adjustable rate. Just like the annual ARM the monthly ARM has cap rates too. The monthly may change on a monthly basis and is capped at no more than a 2% adjustment up or down. The lifetime cap rate is 10% over the start rate. As an example, if the start rate was 4.5% the most it could ever go would be 14.5%.|
With the adjustable rate mortgages you have the following options with your home loan:
|Tenure||Term||Line of Credit||Modified Tenure||Modified Term|
|Equal monthly payments for as long as you live in the home.||Equal monthly payments for a fixed period of months as decided by the borrower.||Payments made at various times and in amounts dictated by the borrower(s).||Equal monthly payments for as long as you live in the home along with a line of credit.||Equal monthly payments for a fixed period of months as decided by the borrower along with a line of credit.|
With the fixed rate option, as stated earlier, you get a lump sum of cash and that is it.
The Three Buckets of Loan Fees
There are three buckets of loan fees with a reverse home loan. The first bucket is the origination fee which is what the lender charges to do your loan. The second bucket is third part fees. The last bucket is the initial mortgage insurance premium or IMIP.
Mortgage Insurance Premium
You will incur a cost for FHA mortgage insurance. The insurance guarantees that you will receive expected loan advances, allows you to borrow more money at a better interest rate and makes the loan non-recourse. You are able to finance the insurance premium (MIP) inside your reverse loan.
The insurance premium is calculated at 2% of the max claim amount. The max claim amount is the appraised value of the home up to the FHA loan limits.
Third Party Charges
Closing costs from third parties may include an appraisal, title search and insurance, surveys, inspections, recording fees, property taxes, credit report checks in addition to other fees.
You will pay an origination fee to pay the lender for processing your HECM loan. A lending institution may charge the higher of $2,500 or 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. Origination fees in Carnelian Bay are capped at $6,000.
In order to get the best interest rates and fees for your home loan you will need to shop around. This means you will need contact several different lenders and get quotes from them in order to determine which lender you want to work with.
Still have questions about getting a HECM in California? Give me a call today and I am happy to help in any way I can. There is no cost to meet with me.
Carnelian Bay Jumbo Reverse Mortgage
Up to this point, everything we have covered is about the FHA HECM (Home Equity Conversion Mortgage). While the HECM is an excellent product, sometime there are situations where alternatives to this type of home loan come into play.
There is a jumbo reverse mortgage available. This loan is very similar to the HECM but there are also some very big differences.
Benefits of a Jumbo Reverse
- You can borrow up to $4,000,000 depending on the value of your home.
- There is no mortgage insurance.
- Closing costs are often half the cost of the HECM and in some cases may only cost you about $125.
- You only need to be 60 instead of 62 for the jumbo reverse.
- Non-FHA approved condo projects can be approved.
- Fixed interest rate.
Negatives of a Jumbo Reverse
- Interest rates can be as much as 2% to 4% higher.
- Higher interest rates mean the loan balance will grow more quickly.
- The percentage of your home’s value that you can access is lower.
- Lump sum option only. However, this will probably be changing in the future as these loan options evolve.
We are Your Local Experts
Ready to take the next step in getting this loan? Give us a call and let’s talk. We are happy to answer all of your question, determine if you qualify for a reverse home loan and help you structure your loan to best meet your needs.
There is no cost or obligation to talk with us on the phone or to meet with you face to face. Our goal is to educate you and answer all your questions so that you are empowered to make the decision if the Carnelian Bay reverse mortgage is the right choice for you. We look forward to hearing from you