Reverse loans are a potential tool that seniors may use to leverage their monthly income and to preserve their savings or retirement portfolio funds.
They are the most regulated mortgage in the lending industry with many safeguards in place to protect the borrowers and their families from financial abuse, accessive fees or predatory lending. They are a "non-recourse" mortgage which means that the borrowers and or their estate can never owe more than the value of the property when the loan is repaid and if the FHA HECM happens to be the choice a senior selects for their loan, it is insured by FHA providing additional protection for the borrower and their estate. It is like any other mortgage in that it is a lien against the subject property, however, the borrower is not required to make mortgage payments, but do remain obligated in paying property taxes, hazard insurance, and any other fees associated with their home and keeping it well maintained. There is no "loan term" or prepayment penalties and they can also be used to purchase a home if seniors wish to "right size" into a new home that better suits their lifestyle.
That depends on several factors. The age of the youngest borrower ( If there are two borrowers), the value of the property or the Principal Limit and whichever is less. In the case of a Propriety mortgage, it would be a percentage of the appraised value, as Principal Limits are not applicable. And then the loan program, either Fixed or an ARM and then whatever the interest rate is on the selected loan option. For the HECM loans, the amount could be $300,000 and for the Proprietary mortgages considerably more than the HECM.
Homeowners as long as they are age 62 or older and the property is a single-family residence, FHA approved Condo, manufactured homes ( Must not be designated as a Condo and are obligated to pay property taxes and built after June 1976) 2-4 Units but must occupy one of the units. Spouses who are under age 62 may remain on the Title but do not sign the Note and Deed of Trust and can remain in the property under the loan terms if their older borrowing spouse pre-deceases them.
Once the last borrower passes away and loan servicing is notified by the Estate, they will send out a letter advising said "Estate", they have 6 months to satisfy repayment of the loan. The Estate can request an additional 6 months if they can show to loan servicing that they are active either in the process of selling the property or refinancing it into a traditional loan. The Lender never assumes ownership unless the Estate decides they do not wish to retain the property and return it to the Lender for a foreclosure.
Option Funding, Inc. is a California owned and operated full-service mortgage brokerage that has proven effective in providing timely and efficient closings on Reverse loans.
The management team we have established has a combined industry experience of 33 years and our Loan Consultants are licensed and very experienced in representing the Reverse mortgage program.
We have been originating the FHA HECM mortgage for many years and have a great deal of experience in how to guide our clients to the best decision to maximize the goals that they wish to achieve without any obligation on their part.
We personally meet all of our clients in the comfort of their home, providing them with a presentation package of information that is personalized just for them, enabling them to make the best-informed decision as to whether or not a Reverse loan is the best choice for them.
We remain in contact with all of our customers and we are always available to answer any questions that they may have long after their loan has funded and closed. The senior community is our #1 priority.
Our staff is well organized and very experienced in processing each loan in a timely manner, making for a quick close and a satisfying experience for each one of our clients.
We are members of the National Association of Realtors, the California Association of Realtors and several smaller local Boards of Realtors as well. We belong to the California Association of Mortgage Brokers (CAMB) and governed by the United States Department of Housing and UrbanDevelopment (HUD) with respect to all FHA loans and the Home Equity Conversion Mortgage (HECM).
Option Funding, Inc.
“Professionalism, Dedication & Honesty”
5644 Lindero Canyon Road, Suite 626
Westlake Village, CA 91362
NMLS ID 163400