Reverse Mortgage Facts – Everything You Need to Know

A reverse mortgage is a specialized loan option for homeowners aged 55 and older, enabling them to transform a portion of their home equity into cash without needing to sell their property. Unlike a conventional mortgage, borrowers aren’t required to make monthly mortgage payments; instead, the loan is repaid when you choose to refinance, move out, sell the home, move out or pass away.

Homeowners in Mission Viejo looking to qualify for a reverse mortgage must meet the following criteria:  

- Be at least 62 years old (or 55+ for specific jumbo reverse mortgages)  

- Own a home that serves as their primary residence  

- Have adequate home equity  

- Fulfill financial assessment requirements established by lenders  

• Access to tax-free cash to enhance retirement income 
• No obligation for monthly mortgage payments 
• Homeowners maintain ownership of their property
• Option to receive payments as a lump sum, through monthly installments, or as a line of credit
• Non-recourse loan protection—heirs will never be responsible for paying more than the home’s value  

The amount of the loan is influenced by several factors, including:  

• Home value (higher valuations may qualify for jumbo reverse mortgages)  
• Age of the youngest borrower  
• Current interest rates  
• Type of loan and chosen payout option

A jumbo reverse mortgage caters to homeowners with properties valued above the FHA loan limits ($1,209,750 in Orange County, CA, as of 2024). These loans provide:  

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

Absolutely! A reverse mortgage refinance in Mission Viejo enables homeowners to replace their current mortgage with a new reverse mortgage to:  

• Increase cash payouts if home values appreciate  
• Secure lower interest rates  
• Access improved loan terms  

Upon the last borrower leaving the home in Mission Viejo:  

• The property is sold to settle the loan balance  
• Heirs have the option to keep the home by repaying the loan or refinancing  
• If the property’s market value is less than the loan balance, the lender incure
       the loss due to non-recourse loan protections