Reverse Mortgage Payoff Loans in California

HCS Equity provides loans to pay off reverse mortgages and offers flexibility to an executor to manage a home or estate without being forced to sell assets to make ends meet or meet the terms of the lender.

What an Estate and Its Heirs Need to Know About Paying Off Reverse Mortgages

Elderly homeowners sometimes take out a reverse mortgage or home equity conversion mortgages (HECM) on their home to finance living expenses without the need for monthly mortgage payments.

Upon the death of the homeowner, the reverse mortgage loan immediately comes due, meaning that either the estate or its heirs must pay off the entire loan associated with the reverse mortgage within a short time to keep the property. In some cases, a reverse mortgage was taken out on the home unbeknownst to the heirs.

This can be a big repayment amount if you’re an heir or a family member who wasn’t aware of the reverse mortgage, or being tasked with paying it off. Oftentimes, family members do not have the flexibility or liquidity to pay off the entire balance of a reverse mortgage to the lender in a short time.

A reverse mortgage has strict time requirements for the payoff period after the passing of occupants. A loan from HCS Equity provides the estate with time to find permanent financing for the home.

Additional Benefits for a Trust or Estate to Borrow from HCS Equity Include:

  • Competitive rates and terms
  • No personal guarantee required
  • Interest-only payments
  • No, prepayment penalties to your lender
  • No minimum months of interest

Funds are typically available within 7-10 business days — fast enough to deal with a reverse mortgage’s existing mortgage balance

HCS Equity provides loans to pay off reverse mortgages and offers flexibility to an executor to manage a home or estate without being forced to sell assets to make ends meet or meet the terms of the lender.

FAQs

A reverse mortgage loan is a way for borrowers to use the existing equity of their principal residence as a line of credit, Reverse mortgages are typically more popular with older homeowners who have had their home value appreciate enough to have a high amount of equity in their homes. Generally, seniors use these loan proceeds from their home equity to pay down other debt, go on vacation, or do anything else they’d like to as a borrower.

When it comes to cash flowing their retirement, some older homeowners in the United States may begin looking to lenders to consider a reverse mortgage. Depending on how much money is owed to the lender and the home’s value when appraised, you may actually be facing a loan default or foreclosure on your home if heirs can’t fulfill the terms of the HECM program and the accompanying loan documents under state law. That being said, heirs may also qualify to pay off a percentage of the value of the home, depending on how its appraisal compares to the reverse mortgage itself.

A reverse mortgage on their home can help seniors make the most of retirement. Plus, eligibility standards for a reverse mortgage are usually relatively easy to meet if you have enough equity in your home by the time you reach 62 years of age. You may also qualify as an applicant for different programs through HUD (the Department of Housing and Urban Development) or another lender. While working with a reverse mortgage lender as a borrower can certainly be helpful, there are some situations where a reverse mortgage loan can get your heirs in trouble when you pass away. Your heirs will suddenly be on the hook for the loan balance of your reverse mortgage without a chance to refinance or negotiate better rates with the lender. As such, it’s a good idea to talk to your heirs and their family members about the reverse mortgage on your home so that they know you’ve taken out a reverse mortgage from a lender.

Generally, reverse mortgage applicants are not thinking about the heirs of a home when talking to reverse mortgage lenders. One of the major benefits of a reverse mortgage is that while you’re responsible for property taxes and other monthly upkeep fees, you’ll get a monthly payment from the lender as part of the reverse mortgage process. This type of loan can sound too good to some borrowers since a reverse mortgage ultimately means that you don’t have to make traditional mortgage payments or worry about refinancing to take advantage of better interest rates. However, as HECM loans and some reverse mortgages are federally insured through the FHA, borrowers looking to take advantage of their current home value with this kind of home equity loan can really benefit from HECM loans. Since it gives them less to worry about other than property taxes and basic maintenance and utilities, the origination fee or different interest rate is generally well worth the price as a borrower, since your lender will handle the rest for you through the HECM program and doing the reverse mortgage work for you.
The main situation that would require a trust to seek out a lender to pay off a reverse mortgage is a protracted negotiation between the beneficiaries. One beneficiary may want to keep the home but is unable to take title until negotiations with the other heirs are finalized. The reverse mortgage lender, however, is only interested in the full repayment of the reverse mortgage on the home regardless of the credit situation of the beneficiary who is ultimately going to take the property. If the beneficiary is not on title, it is impossible to borrow against the property. Only the trust could borrow against the property to repay that reverse mortgage in that scenario.

Looking to get started?

Call us today if your attorney has advised you to seek out a 3rd party loan to preserve your parent’s or grandparent’s Proposition 13 tax base. We are a direct lender, which allows us to make quick approval decisions, and provide funding in as little as 7-10 days.

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