California Reverse Mortgage

Homeowners above the age of 62 can turn their home equity into cash without moving out of the home they love using reverse mortgages. With this specialized loan product, you can eliminate monthly mortgage payments and receive steady, tax-free income to enjoy retirement.

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Our California Reverse Mortgage Options

Our team of loan specialists will help you find the perfect reverse mortgage lender for your unique needs.

California Reverse Mortgage Loan Process

We will guide you through every step of a reverse mortgage transaction with our seamless, streamlined process.

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California Reverse Mortgages: Secure Your Financial Future

A California reverse mortgage loan is an easy way for seniors to stay in their primary residence while utilizing their equity to create positive cash flow. Obtaining a reverse mortgage can help you afford the retirement of your dreams.

Benefits of a California Reverse Mortgage

While beautiful, California is a costly place to live. The cost of living in the state is 38% higher than the national average, which can cause significant issues for older Californians on a fixed budget.

The average home value in the state is more than $770,000, up by 5.1% over the last year; places like Los Angeles are even more expensive at more than $900,000. However, this can significantly benefit older homeowners, who can use reverse mortgages to access equity from an owner-occupied property.

Unlike other products that leverage home values, like a home equity loan or home equity line of credit, reverse mortgages do not need to be paid back until you sell the house, move away, or pass away.

The loan advances are tax-free and won’t impact your Social Security or Medicare access. You also do not need a specific FICO score to obtain a reverse mortgage, though your payment history on your current mortgage may influence your eligibility.

How Does a California Reverse Mortgage Work?

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), insured by the Federal Housing Administration.

This program, a division of the Department of Housing and Urban Development (HUD), provides federal funding to lenders if a homeowner defaults on loans and ensures that borrowers are not loaned more money than their home is worth.

To qualify, borrowers must be at least 62 years old and use the home as their principal residence. They should not owe federal debt and must have at least 50% equity and enough funds for home maintenance, homeowner’s insurance, and property taxes.

Before signing the loan documents, you must undergo a counseling session with a HUD-approved counselor. This ensures you understand your obligations and how reverse mortgages differ from other products like a home equity loan. The counseling session typically takes less than two hours.

As an important note, the California Department of Business requires that lenders wait seven days between the borrower undergoing mandatory counseling and approving the loan.

However, they can accept a preliminary reverse mortgage application during this time. The entire loan cannot be more than $1,149,825. If you require more than this, you will need to apply for a jumbo reverse mortgage from a private provider.

Once your loan is approved, your first mortgage will be replaced with a larger loan based on the home’s appraised value, and you will receive a percentage of the home’s value back as payments. You can receive your loan proceeds in several ways: a lump sum, monthly payments, a credit line, or a mix of all three.

The loan does not go into repayment until the home transfers ownership, such as when the homeowner moves, sells the house, or passes away. The estate or surviving family members will then need to pay the loan to keep the property. They can usually purchase the home for 95% of its current value if the home is underwater.

Why Choose Arnaiz Mortgage for Your California Reverse Mortgage

We are California mortgage experts here to help homeowners put their most important assets to work. Our team of loan specialists is deeply familiar with the California housing market. We work to match borrowers with the perfect loan product for their needs, including Home Equity Conversion Mortgages (HECMs).

Our goal is to ensure every reverse mortgage loan applicant has a seamless, stress-free experience. We’ll guide you through every step of the process, answer your questions, and offer helpful, transparent advice that matches your specific financial needs.

At Arnaiz Mortgage, we believe in building relationships with borrowers based on mutual trust and respect. Whether you want to purchase a vacation property without opening a new loan, perform necessary home upgrades, or simply enjoy a better quality of life, we’ll help you obtain the financing you need to achieve your dreams. To start the process, call us today at (623) 806-4645 or apply online.

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Frequently asked questions about California Reverse Mortgage

  • What are the eligibility criteria for a reverse mortgage in California?

    To be eligible for a reverse mortgage, the prospective borrower must meet the following requirements:

    • All cosigners must be above the age of 62
    • Use the home being mortgaged as a primary residence
    • They should have at least 50% equity in the home
    • They cannot owe any federal debt, or the federal debt must be repaid using the loan proceeds first
    • They must go through financial counseling with a HUD-approved counselor
  • How much home equity is needed to qualify for a reverse mortgage in California?

    You typically need 50% equity for HECMs. However, private lenders may offer proprietary reverse mortgages with different percentages.

  • What are the fees and closing costs associated with a reverse mortgage in California?

    Borrowers must pay the lender’s origination fees, which are capped at $6,000 for HECMs, and closing costs like inspections, appraisals, and title searches. They also must pay mortgage insurance premiums, which include an initial MIP of 2% and an annual MIP.

  • How does a reverse mortgage affect property taxes and insurance in California?

    You will still be responsible for payment of California real estate taxes and homeowner’s insurance with a reverse mortgage, but they should remain unchanged, as loans do not influence the appraisal value of your assets.

    Additionally, the income from a reverse mortgage is tax-free and will not impact most government programs like Social Security or Medicare. You may receive less if you receive certain needs-based benefits like Medicaid or SSI. We will help determine how a reverse mortgage will impact your financial situation.

  • What happens if I sell or move out of my home in California with a reverse mortgage?

    If you move or sell the property, your loan enters repayment, and you will make regular monthly payments.

  • Can I refinance my existing reverse mortgage in California?

    Yes, you can refinance a reverse mortgage. For example, if you opened your loan with higher interest rates and would like to take advantage of better rates or change the terms, you can convert a reverse mortgage into a traditional mortgage and start making payments again.

  • How do home values in California impact reverse mortgage loan amounts?

    High home values mean you have more equity available and can take out a higher reverse mortgage. California real estate has experienced explosive growth in the last few years, representing a significant potential windfall for seniors.

  • How will a reverse mortgage in California affect my heirs and estate?

    Any time the property transfers ownership, the loan will come due, meaning that family members must either pay off the loan or sell it for at least 95% of its appraised value if it’s underwater. Otherwise, heirs can sell the property for whatever they like.

  • Are there any restrictions on how I can use the funds from a California reverse mortgage?

    A HECM, the most common type of reverse mortgage, has no restrictions on how you can utilize your loan funds. However, it is possible to access single-purpose reverse mortgages, where you and the lender agree on a specific way to use the funds.

    You will then need to show the mortgage company that you have applied your funds to the agreed-upon purpose, such as buying a new property or covering other debts.

  • How long does the reverse mortgage process take in California?

    In general, the process of getting a reverse mortgage takes between 30 and 45 days, but your specific circumstances may impact how long it takes to receive your money. Our team at Arnaiz Mortgage will keep you updated throughout the process and ensure you’re aware of any potential delays.