Frequently Asked Questions

Yes. Reverse mortgages are insured: since 1989, the Home Equity Conversion Mortgage (HECM) has been insured by the federal government through the Federal Housing Administration (FHA), a division of the Department of Housing and Urban Development (HUD). Also, reverse mortgages require counseling sessions and financial assessments before approval for additional measures of safety.

No. Reverse mortgages are not the best choice in every circumstance, but if you feel that you require more financial flexibility or that your life can be made more comfortable with a lump sum of cash or line of credit, a reverse mortgage is an excellent way to leverage your home’s equity while ensuring that you can live comfortably.

A C2 reverse mortgage is a plan from C2, a mortgage brokerage in San Diego. However, there are other options for reverse mortgages.

Reverse mortgage counseling follows HUD guidelines, with trained counselors providing eligibility requirements, financial implications, and payment provisions.

Yes, like any mortgage, you can refinance reverse mortgages. HECM requirements must be met. Learn about our reverse mortgage refinance services.

Potentially. Since reverse mortgage amounts can be counted as income, it may affect eligibility for the “needs-based” requirement of Medicaid.

The money you receive from reverse mortgages is typically tax-free, but, as the California DRE recommends, you should consult with an independent tax professional to determine individual tax consequences of a reverse mortgage. Options vary depending on individual circumstances.

Yes. You own your property, so you can sell it, pay back the loan, and take the remaining cash to finance your new home.

Yes, you can use the money received through a reverse mortgage to purchase a home. The HUD allows this only if you can use the cash on hand to pay the difference between the reverse mortgage proceeds and the sales price plus closing costs for the purchased property.

Yes. Since reverse mortgages can provide lump sums, the cash flow afterward can allow a variety of situations, including a short sale. Homes with a reverse mortgage can be sold, with similar requirements to using the money to purchase another home, as explained above.

Reverse mortgage amounts vary. The amount that can be received is based on the youngest borrower’s age, the property’s current interest rate, its current liens, and the FHA lending limits.

Yes. Proceeds can be obtained as either a cash lump sum or through a line of credit depending on the borrower’s preferences.

Yes. Depending on circumstances, reverse mortgages can be bought back after they are purchased.

Yes. While it isn’t necessary to make monthly payments in a reverse mortgage, you have the option to pay any amount at any time.

Yes. Many reverse mortgages work for seniors who have their houses paid off and are looking for increased cash flow.