Important Things To Do Complaint Forms
Before You Make a Decision: If you have a complaint against a mortgage broker,
complaint forms are available at
n Decide how long you expect to stay in [Link] or you can call
the home. (877) 373-4542 for assistance.
n Consult with a Housing and Urban
Development (HUD)-approved reverse Contact DRE
mortgage counselor before you apply. To contact the California Department of Real Estate,
A counselor can help you decide call (877) 373-4542 toll-free for assistance in
whether a reverse mortgage or some English or Spanish.
alternative is the best choice for you.
To find a HUD-approved Home Equity Department of Real Estate District Offices
Conversion Mortgage (HECM) counselor
near you, call (800) 569-4287. Sacramento Los Angeles
(Principal office) 320 W. 4th Street, Suite 350
n Decide if you really need a reverse 651 Bannon Street, Los Angeles, CA 90013-1105
mortgage. Another type of loan may STE 500
Oakland
be a less costly solution. Discuss this Sacramento, CA 95811
1515 Clay Street, Suite 702
with a counselor. Fresno Oakland, CA 94612-1462
n Include trusted family members in the 2550 Mariposa Mall, Suite
San Diego
decision-making process. If inheritance 3070
8620 Spectrum Center Blvd.,
is an issue, adult children may be willing Fresno, CA 93721-2273
Suite 301
to help. San Diego, CA 92123
n Shop around and compare offerings.
Not all reverse mortgages are the same;
their terms vary substantially.
n Determine if a reverse mortgage will
affect your ability for “needs-based”
public assistance benefits. Reverse Mortgages
n Review your mortgage broker’s license Is One Right for You?
record. Call DRE for clarification on any
discipline taken.
CAUTION: This general information is NOT a substitution
for the advice of an attorney, accountant, and/or
financial planner. Before you decide to pursue a reverse
mortgage, you should carefully consider your individual DEPARTMENT OF REAL ESTATE
circumstances so you can make a wise decision about the 651 Bannon Street, STE 500
most valuable asset you may own—your home. Factors to Sacramento, CA 95811
consider include whether the proposed reverse mortgage Public Information Line: (877) 373-4542
Fax: (916) 263-8943
is a recourse or nonrecourse loan, whether the loan
[Link]
would have a fixed or adjustable interest rate, and/or the
current and projected market value of your home.
PDE_18-131
What is a Reverse Mortgage? Potential Drawbacks of a • How much can I borrow through available
reverse mortgage products?
If you are 62 or older, reverse mortgages are a Reverse Mortgage
way to borrow against the equity in your home • How much will it cost me in origination
• They are more complicated than conventional
(the value of your home minus any mortgage fees, closing costs, interest, monthly, or
mortgages, and the consequences of various
debt you may have) to provide what may be periodic fees?
plans/options are not always obvious.
tax-free income (often referred to as cash flow). • Will I have to sell my home before I die to
A reverse mortgage requires no scheduled loan • They are relatively expensive compared to
pay off the reverse mortgage?
payments until the loan ends. other loans, including home equity loans,
especially at the time the loan is originated. • If I die and my partner is still living in my
home, will he or she have to leave or pay
Potential Advantages of a • Although the money you receive is typically
off the reverse mortgage?
Reverse Mortgage income tax-free, it may affect your eligibility
under existing law for “needs-based” public • Will the reverse mortgage become due and
• A reverse mortgage may help you continue assistance benefits such as Supplemental payable if I require long-term care and move
your financial independence and maintain Security Income (SSI) and Medicaid/MediCal. to an assisted-living facility, or to a nursing or
or improve your quality of life. convalescent home?
• They may reduce or eliminate the equity
• A reverse mortgage allows you to remain in in your home, affecting the estate to be • Will there be anything left for my partner,
and keep the title to your home. distributed to your heirs. my heirs, or me when the reverse mortgage
• The money you receive is generally is fully paid?
• When the product is other than an FHA-insured
not considered taxable income. You mortgage, you should confirm the reverse • Are there any fees, costs, or other charges
should consult with an independent tax mortgage is entirely a non-recourse loan. This due when the reverse mortgage is fully paid?
professional to determine individual tax means the liability to repay the loan is limited (Regardless of product, prepayment penalties
consequences of a reverse mortgage. to your home (its then market value or sales cannot be demanded when the reverse
• You make no payments until the end of the price) and would not subject any of your other mortgage is partially or fully prepaid.)
term of the loan (defined to be when the last assets or income, or the income and assets of • What are my continuing financial obligations
eligible borrower permanently leaves or your heirs, as sources for repayment. with a reverse mortgage, such as property
sells the home, when you die, when a fixed • They are often not well understood by real maintenance, property taxes, insurance
due date occurs, or at the end of the loan estate, mortgage, tax, or legal professionals. premiums, and homeowners’ association
term as it otherwise may be determined). Check out their experience with these assessments or fees (as applicable)?
• You can eliminate mortgage payments by mortgages before accepting their advice.
paying off existing loans through proceeds Types of Reverse Mortgages
from the reverse mortgage. Important Questions to Ask Before • FHA-insured mortgage: A Home Equity
Conversion Mortgage (HECM) product.
• You can select from several different benefit Choosing a Reverse Mortgage
payment plans/options to meet your needs. • Lender- or privately-insured mortgages:
• How much money do I need?
• Your income or credit score is not a These are known as “proprietary” products,
consideration in obtaining a reverse • Is there a way to meet my needs that does not but such products are not currently available.
mortgage, since no payments are required involve a reverse mortgage?
• Uninsured mortgage products offered by a
until the loan ends. • Will a reverse mortgage make my partner or financial institution or a licensed lender:
• Independent counseling is required in me ineligible for any “needs-based” public Again, proprietary products are currently
advance. assistance benefits—now or in the future? not available.
• Does my home qualify for a reverse mortgage?