Reverse-Mortgage-Truth.com

Los Angeles is in only a slightly less dire situation than San Diego, with an average home price decline of 12% year over year, compared to San Diego’s 15% decline. One reverse mortgage lender has started reducing the loan amounts on a case-by-case basis and has recently included homes in Los Angeles County in the cuts. One major jumbo reverse mortgage lender has announced a 5% cut to loan amounts, while another held off listing Los Angeles as a declining market.

Next post, I'll provide an update about San Francisco.

More info on Los Angeles Reverse Mortgages can be found here.

San Diego is one of the hardest-hit markets in California and has seen home values drop by up to 30% in some inland communities. Seniors were once able to qualify for a $300,000 reverse mortgage on a $700,000 home, and now qualify for only $200,000 on their current home value of $500,000. San Diego County is now widely-recognized as a “declining market”, as if declining values weren’t already bad enough. As a result, most California reverse mortgage lenders are automatically reducing the amounts that they will lend on homes in San Diego by 5-6% for their jumbo programs.

Next post will be about Los Angeles.

Info on San Diego Reverse Mortgages

Over the past 5 years reverse mortgages in California have grown into an accessible and increasingly popular way for seniors to increase their financial means during retirement. Across all areas of California seniors have utilized reverse mortgage programs to accomplish worthwhile purposes such as ridding themselves of their mortgage payment by paying off existing mortgage debt; to make improvements to their home or cover maintenance expenses with a lump sum of cash; to enjoy a more comfortable lifestyle by increasing their monthly stream of income. Seniors have found practically endless uses for the additional funds from a reverse mortgage.

The minimal requirements for reverse mortgages in California have made them relatively easy to obtain. Seniors need only adequate equity in their home to qualify – credit scores, income and other assets do not matter. However, due to declines in the real estate market this past year seniors in some parts of California no longer have the certainty of adequate equity in their homes. As the real estate market in California is now firmly established on a declining path, it is more difficult to qualify for a reverse mortgage because the amount of home equity that seniors have is diminishing. Some parts of the state, however, are faring better than others.

Next we'll focus on San Diego reverse mortgages.

Wow, have interest rates gone up this week! The fixed rate HECM is up 0.3% and the LIBOR-based products are up 0.33%.

Jumbos:
Cash Account Advantage jumbo reverse mortgage: 6.52% (Index is 6 month LIBOR at 3.02% [rounded] plus margin of 3.5%)
Independence Plan 210 jumbo reverse mortgage: 5.12125% (Index is 6 month LIBOR at 3.02125 plus a margin of 2.10%)
Independence Plan 360 jumbo reverse mortgage: 6.62125% (Index is the 6 month LIBOR at 3.02125 plus a margin of 3.6%)

Conforming FHA:
HECM Reverse Mortgage rate: 3.17% (Index is the 1 Year CMT at 1.67% plus a margin of 1.5%)
Fixed rate Reverse Mortgage - HECM: 6.30% to 6.81% (depending on the lender)

Rates are not APR’s and include no closing costs. Click here for a reverse mortgage quote.