Reverse Mortgage Facts – Everything You Need to Know

Frequently Asked Questions About Reverse Mortgages in Dana Point

  • What is a Reverse Mortgage and How Does It Work?

    A reverse mortgage is a home loan designed for homeowners 62 years and older that allows them to convert a portion of their home equity into cash without selling their home. Unlike a traditional mortgage, borrowers do not make monthly mortgage payments—instead, the loan is repaid when the homeowner moves, sells the home, or passes away.

  • Who Qualifies for a Reverse Mortgage in California?

    To qualify for a reverse mortgage in Dana Point, homeowners must:

    • Be 62 years or older (or 55+ for certain jumbo reverse mortgages)
    • Own a home that is their primary residence
    • Have sufficient home equity
    • Meet financial assessment requirements set by lenders

  • What Are the Benefits of a Reverse Mortgage?

    • Access to tax-free cash to supplement retirement income
    • No monthly mortgage payments required
    • Homeowners retain ownership of their property
    • Flexibility to receive payments as a lump sum, monthly payments, or a line of credit
    • Protection with non-recourse loan terms—heirs will never owe more than the home’s value

  • How Much Money Can I Get with a Reverse Mortgage in Orange County?

    The loan amount depends on several factors, including:

    • Home value (higher values qualify for jumbo reverse mortgages)
    • Age of the youngest borrower
    • Current interest rates
    • Loan type and payout option chosen

  • What is a Jumbo Reverse Mortgage?

    A jumbo reverse mortgage is designed for homeowners with high-value properties exceeding FHFA loan limits ($1,149,825 in Orange County, CA, as of 2024). These loans offer:

    • Larger cash payouts than standard FHA-backed HECM loans
    • No mortgage insurance premiums (MIP)
    • Flexible loan terms and payout options

  • Can I Use a Reverse Mortgage to Refinance an Existing Loan?

    Yes! A reverse mortgage refinance allows homeowners to replace their existing reverse mortgage with a new one to:

    • Increase cash payouts if home values rise
    • Secure lower interest rates
    • Access better loan terms

  • What Happens to My Reverse Mortgage When I Pass Away?

    When the last borrower leaves the home:

    • The home is sold to repay the loan balance
    • Heirs can keep the home by paying off the loan or refinancing
    • If the home is worth less than the loan balance, the lender absorbs the loss due to non-recourse loan protections

  • How Do I Start the Reverse Mortgage Process?

    The process begins with a free consultation with a licensed reverse mortgage lender. Our team at Green Monarch guides you through:

    • Initial assessment & eligibility review
    • Loan application & appraisal
    • Financial counseling (required by FHA)
    • Loan approval & funding