Los Angeles Reverse Mortgage FAQs
For Refinance & Purchase in Los Angeles
Discover How a HECM Reverse Mortgage Can Easily Provide You with a Non-Taxable Cash Flow Without Depleting Your Savings or Managed Funds
Reverse Mortgage & Home Equity FAQs
Six expandable sections.
Homeownership & Equity
If you have a reverse mortgage, do you actually own the house?
Yes. You hold legal title; the lender records a lien until you pay off the loan. After payoff, you own the home free and clear.
How do I know the equity in my home?
Equity = current market value − mortgage balance. Use comps/estimators for a quick check or an appraisal for accuracy.
What is “my home equity” and how is it calculated?
It’s your ownership stake. Example: $600,000 value − $240,000 balance = $360,000 equity.
How can I use my home equity?
Common uses: home improvements, debt consolidation, medical costs, retirement income, or an emergency fund via HELOC or reverse mortgage.
How do I get equity out of my home?
Cash-out refinance, home equity loan, HELOC, or—if you’re 62+—a reverse mortgage (HECM or proprietary).
How do I check equity in my home quickly?
Pair an online value estimate with your latest payoff amount. For lending decisions, get a professional appraisal.
Can I get a reverse mortgage if I still have a regular mortgage?
Yes. Proceeds first pay off your existing mortgage; remaining funds are then available to you.
Does a reverse mortgage affect my credit score?
Generally no—there’s no required monthly payment reported. Lenders do a financial assessment and may review credit history.
How often should I check my home equity?
At least annually, or before big decisions like refinancing, major renovations, or retirement planning.
Reverse Mortgage Basics
What does “reverse mortgage” mean (definition & meaning)?
A reverse mortgage lets homeowners 62+ convert equity into cash or a line of credit with no required monthly mortgage payment; it’s repaid at sale, move-out, or death.
What does HECM stand for (HECM meaning)?
HECM = Home Equity Conversion Mortgage, the FHA-insured reverse mortgage with federal protections and mandatory counseling.
What are my reverse mortgage options (HECM, proprietary, single-purpose)?
HECM (FHA-insured), proprietary (private/jumbo), and single-purpose (local/nonprofit for specific uses).
Are reverse mortgages legitimate and safe?
Yes—when using HUD-approved lenders. HECMs require independent counseling, are non-recourse, and include standardized disclosures.
Who qualifies for a HECM reverse mortgage?
Typically age 62+, live in the home as a primary residence, have sufficient equity, and can meet taxes/insurance/maintenance.
What is the principal limit, and what affects it?
It’s the maximum you can borrow based on age, interest rates, and home value up to program limits.
What are the upfront and ongoing costs?
Common items: origination fee, third-party closing costs, mortgage insurance (for HECM), and interest/servicing. Many costs can be financed.
Fixed vs adjustable reverse mortgage—what’s the difference?
Fixed often provides a single lump sum; adjustable offers line of credit and payout flexibility with rate adjustments over time.
Line of Credit & Payments
What is a reverse mortgage line of credit (HECM LOC)?
An on-demand line whose unused portion grows over time. Interest accrues only on amounts drawn.
Do you make monthly payments on a reverse mortgage?
No required principal & interest payments. You must still pay property taxes, homeowners insurance, and maintain the home. Voluntary payments are allowed.
How does the HECM line of credit grow?
The unused portion grows over time by a formula tied to the loan’s interest rate and mortgage insurance.
Can the lender freeze or cancel my line of credit?
HECM lines generally remain available as long as you meet obligations like taxes, insurance, occupancy, and maintenance.
Can I make voluntary payments to control interest?
Yes. You can pay interest or principal anytime to manage the balance growth.
Refinance & Payoff
Can you refinance a reverse mortgage (HECM or proprietary)?
Yes—to access more equity, lower the rate, or change terms/products. Expect counseling and closing costs; calculate your break-even.
Can you pay off a reverse mortgage early? How?
Yes—anytime without prepayment penalty. Pay from savings, sale proceeds, or refinance into another loan. Heirs may also repay after maturity.
How do I pay off a reverse mortgage (including the 95% rule)?
Most loans are paid off at sale. Heirs can keep the home by paying the lesser of the balance or 95% of appraised value on HECMs (non-recourse).
When does a reverse mortgage refinance make sense?
When rates fall, home value rises, or age increases boost proceeds. Program seasoning rules may apply—ask your lender.
What is “seasoning” in reverse mortgage refinancing?
Minimum time and/or benefit standards between closings; specifics vary by program and lender.
What fees apply when refinancing a reverse mortgage?
Expect new closing costs and possibly mortgage insurance (for HECM). Compare total cost to projected benefit.
Property Types & Eligibility
Can you get a reverse mortgage on a condo or a mobile home?
Condos: FHA-approved (for HECM) or per proprietary rules. Manufactured homes: must meet HUD standards and be on a permanent foundation.
What happens to a reverse mortgage after death?
Heirs may sell, refinance to keep the home, or walk away if the balance exceeds value—HECMs are non-recourse and limit liability to the property.
Can you get out of a reverse mortgage later?
Yes. Repay from savings, refinance, or sell. HECMs include a three-business-day right of rescission after closing.
Can I get a reverse mortgage on a 2–4 unit property?
Often yes, if you occupy one unit as your primary residence and the property meets program guidelines.
What if I move out or go into assisted living?
If it’s no longer your primary residence for an extended period, the loan can become due and payable.
Can I rent my home or do short-term rentals with a reverse mortgage?
You must keep it as your primary residence. Renting part may be allowed; converting to full-time rental typically isn’t.
Can I get a reverse mortgage if I’m under 62?
Not a HECM. Some proprietary (private) programs may allow lower ages—ask a lender about current options.
What happens if property taxes or insurance aren’t paid?
Non-payment can trigger default. Some borrowers use a set-aside (LESA) so taxes/insurance are paid from loan funds.
Compare Products & Professionals
2nd mortgage vs HELOC: what’s the difference?
Second mortgage (home equity loan): lump sum, fixed rate/payment. HELOC: revolving line, typically variable rate; payment depends on usage/rate.
Is a reverse mortgage good or bad?
It depends on your goals. Great fit for aging in place with tax-free* access to equity if you can meet tax/insurance obligations. Less ideal if you plan to move soon. (*Consult a tax pro.)
What are proprietary (private) reverse mortgages vs HECM?
Proprietary = private jumbo loans (larger proceeds, flexible criteria) without FHA insurance. HECM = FHA-insured with federal protections.
What are single-purpose reverse mortgages?
Local/nonprofit loans limited to specific uses (e.g., repairs, taxes). Typically smaller amounts with targeted eligibility.
Reverse mortgage broker vs agent: who does what?
Broker: shops multiple lenders/products for your best option, and guides you from application through closing. Agent/Loan Officer: originates for a lender and guides you from application to closing.
What are HUD-approved HECM counseling agencies and why required?
Independent, HUD-certified counselors who explain costs, risks, and alternatives; counseling is required before applying for a HECM.
Reverse mortgage vs cash-out refinance—how do I choose?
Cash-out refis require monthly payments; reverse mortgages do not. Choose based on cash-flow, time horizon, and equity goals.
Reverse mortgage vs selling and downsizing—what’s smarter?
Selling may free more cash but requires moving and transaction costs. Reverse mortgages let you stay and tap equity while living there.
What should I ask a reverse mortgage broker/loan officer?
Ask about total cost, payout options, rate type, line-of-credit growth, set-asides, refinance rules, servicing, and timelines.
How long does HECM counseling take, and what should I expect?
A one-on-one review of costs, obligations, alternatives, and your budget. You’ll receive a certificate needed to proceed.
Disclaimer & Important Information
Last updated: August 28, 2025
- No tax, legal, or financial advice. This material is for general education only. Consult your own tax advisor, attorney, and financial planner for guidance specific to you.
- Program eligibility varies. Product terms, interest rates, and proceeds are subject to change, underwriting, and property approval. Appraisals and counseling may be required.
- Reverse mortgage obligations. You must continue to pay property taxes, homeowners insurance, HOA dues (if any) and keep the home in good repair. Failure to meet these obligations can result in default and foreclosure.
- Interest & balance growth. With a reverse mortgage, interest and fees accrue over time and the loan balance increases. Equity may decrease.
- Non-recourse protection (HECM). For FHA-insured HECMs, you or your heirs will not owe more than the home’s value at sale. Heirs may keep the home by paying the lesser of the balance or 95% of the appraised value.
- Primary residence requirement. Borrower must occupy the home as a principal residence. Extended absences (e.g., moving, long-term care) can trigger loan maturity.
- Property types. Condos and manufactured homes must meet program guidelines (e.g., FHA approval, HUD standards, permanent foundation).
- Refinance considerations. Refinancing any mortgage (including reverse) involves new closing costs. Evaluate break-even timing and total cost vs. benefit.
- Not affiliated with any government agency. We are not affiliated with, endorsed by, or acting on behalf of HUD, FHA, or any other government agency.
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- State licensing & availability. Products may not be available in all states and are subject to state-specific requirements.
Equal Housing Lender. NMLS Consumer Access: nmlsconsumeraccess.org
Company NMLS #: 135622 | CA DRE Broker #: 01821025
Loan Officer: Moe Nelson — NMLS #992923 | CA BRE #00582319
Company: C2 Financial Corporation
2017 W Lomita Blvd 2041, Lomita, CA 90717
(424) 225-2167 · info@shift2reverse.com
🔍 Page Summary
This Reverse Mortgage FAQ guide provides clear, easy-to-understand answers to the most common questions seniors and homeowners ask about Home Equity Conversion Mortgages (HECM). Learn how reverse mortgages work, who qualifies, what fees to expect, how payments are made, and what happens when the loan becomes due. Designed for Los Angeles homeowners and trusted by local professionals, this page offers accurate insights based on HUD guidelines and current FHA rules.
Other areas near Los Angeles we cover include: