California Reverse Mortgage Information

Reverse mortgages have been a popular option for many California senior citizens in recent years. In fact, up until 2007 California originated more government insured HECM’s (Home Equity Conversion Mortgage) than any other state. Then in 2007 Florida by-passed California for the number of closed HECM loans. However, The Golden State continues to have a very high demand for this Senior home equity loan.

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An obvious reason why HECM’s have been so popular is because of the unusually high home values in the state compared to most other areas of the country. Additionally, from the year 2000 through 2005 this state’s home values sky-rocketed to all time highs. The increase in the amount of equity that the average California homeowner realized during those years was in the double digits annually for most counties throughout the state.

Substantial Equity Required

The reason that home values play such an important role in HECM’s is because the amount of money that you can receive from the loan is based primarily on the amount of equity you have built up over your years of ownership. Equity by definition is the difference between what you owe on your house and what the current market value of your home is. The higher your equity, the higher your benefit or loan amount will be.

Some residents are even using a HECM for Purchase loans to buy a house. Downsizing to a smaller more age friendly property is an attractive option for many retirees, and can be accomplished through the use of a Reverse for Purchase HECM to buy a house.

Putting It Off – Not a Great Idea

Understanding the importance of having substantial equity in your home if you are thinking of applying for a this loan, has been motivating many seniors living in this state to act sooner rather than later. As the nation has been experiencing falling home prices across the board, Californians are experiencing some of the most severe downturns in the country. This translates into lower loan amounts and fewer benefits for those considering a Senior home equity loan.

If you think this type of mortgage is something you will need down the road but not necessarily right now, you may want to give some serious thought to doing it sooner, if you anticipate your property may continue to decline in value. You may be disappointed later if you find out that your loan benefits are drastically reduced because your home is worth less when you decide to apply for a reverse mortgage in California.

Use our calculator to compare benefit amounts based upon various values for your home. You can run the calculator based upon today’s value and then use your browser’s back button on the calculator page to experiment with different home values and compare the difference in your benefit amounts. You may be surprised at how much difference you will see.

If you would like a detailed benefit summary today to see how much money you qualify for, we can help you with a No Obligation Quote.