LifeSource Mortgage is an Orange County, CA Mortgage broker that offers a variety of home loans. Historically, we have focused on home purchases, but in 2021 we decided to bring on an industry veteran to focus on helping homeowners with reverse mortgage in California. Although we are headquartered in San Clemente, CA, we are licensed to lend in all of California, Colorado, and Idaho.
We operate as a broker which makes us better. Each reverse mortgage lender can have subtle differences and not all of them adhere to just FHA rules. Of course any lender that does reverse mortgages has to abide by the FHA guidelines, BUT some lenders add their own rules above and beyond FHA Reverse Mortgage guidelines.
Therein lies the beauty of operating as a broker. For example, some lenders will not do a reverse mortgage on a single wide mobile home or manufactured home. FHA guidelines allow it though. We're connected to quite a few reverse mortgage lenders. Some will lend on a single wide and most will not. Our job is to align ourselves with all the best reverse mortgage lenders so that in turn, we can help you get the best reverse mortgage loan for your household.
A reverse mortgage is a special type of loan that allows older homeowners to gain access to a portion of their equity and convert it to usable money. What California homeowners enjoy the most about reverse mortgages, is that there is no monthly payment for as long as you live or for as long as you live in your home. It provides a massive amount of financial freedom. In fact, you can choose to make a payment if you want, you just don't HAVE to.
The age requirement for reverse mortgage is dependent on the type of reverse mortgage you're seeking. The age or point of entry for a reverse mortgage in California is either 55 or 62. We'll go into greater depth below.
Californians have two options in terms of reverse mortgages in the Golden State. Within each of those options there are several ways to structure the loan. The two types of reverse mortgages in California are the FHA reverse mortgage and the Jumbo Reverse Mortgage (or proprietary reverse mortgage). We expand on each below.
This loan options is available to California homeowners aged 62 and greater. However, if you're a married couple, only one of you needs to be 62 plus and you both have the right to live in the home without making a payment for the rest of your lives. This option does not have a minimum loan, but does have a maximum loan amount that varies based on your age.
This home loan allows you to borrow roughly 50% of your home value up to about 74%. This can vary based on interest rates though. For example, a 62 year old can borrow about 50% of the home value whereas a 92 or older person can borrow about 74% of the appraised value of their home. The percentage you can borrow increases a tiny bit with each passing year.
FHA has something called a "max claim amount". In plain English, that simply mean it's the max appraised value that can be considered with the FHA reverse mortgage. In 2022 the max claim or max appraisal considered it $970,800. In other words, if you're 62 and can borrow about 50% of the appraisal and your home is worth $970,800., then your max loan amount is around $485,500. An appraisal at $2,000,000 does not lead to a larger FHA reverse mortgage loan amount than does an appraisal of $970,800. Since a 92 year old can borrow about 74% of the appraised value, it means their max FHA reverse mortgage loan amount is $721,300 or so.
SFR
Manufactured Homes
Condos (HOA needs to be FHA approved)
Townhomes
2-4 unit owner occupied properties
Modular Homes
Mixed Use
This is a popular option in California simply because our property values are pretty high. This option is available for folks aged 55 and up. If you're married and only one of you is age 55 and the other is not, it may leave the younger spouse unprotected if you pass away first. Talk to your loan officer to find out how it works.
With this reverse mortgage option, you can borrow 27.4% - 40.1% of your homes value at age 55. It increases just a little bit with every passing year until the age of 88 plus where you can borrow 51.2% - 62.3% of your home's value.
This options does have minimum loan amount requirements that vary depending on the lender we need to place your loan with. It's in the $100,000 - $150,000 range.
The maximum loan amount is $4,000,000 with the ability to POSSIBLY get an exception for a higher loan amount up to $6,000,000 on an exception basis.
SFR
Condo
Townhome
2-4 unit owner occupied properties
Modular Homes
Mixed Use
To find out more about a reverse mortgage in California, give us a call at (949) 492-2252 x 704 or visit our website at https://LifeSourceMortgage.com/Reverse-Mortgage
1238 Puerta del Sol, Suite 2-E, San Clemente, CA 92673 - info@LifeSourceMortgage.com
NMLS#3211759, ID MLB# 20803211759, CA BRE# 01869699
The author of this post has an extremely comprehensive website at Reverse Mortgage Info.
Here is our YouTube Channel with plenty of Reverse Mortgage Info.
Here is Shawn's YouTube Channel called Reversed TV.