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Reverse Mortgages in Santa Monica
Santa Monica homeowners sitting on decades of appreciation have unique leverage with reverse mortgages. Properties here often exceed jumbo reverse mortgage limits.
Most borrowers we see bought pre-2000 and own properties worth $2-4M. That equity can fund retirement without selling and leaving the coast.
The catch: loan limits cap how much you can access. High property taxes and HOA fees in Santa Monica still apply—reverse mortgages don't eliminate those costs.
You must be 62 or older. If married, the younger spouse's age determines how much you can borrow—that matters in 20-year age gap situations we see here.
The home must be your primary residence. No mortgage payment required, but you still pay property taxes, insurance, and maintain the property.
Credit and income matter less than with traditional loans. Lenders verify you can cover ongoing property costs through financial assessment.
Existing mortgages get paid off from reverse mortgage proceeds. Remaining funds come to you as lump sum, monthly payments, or line of credit.
Most reverse mortgages are HECMs backed by FHA. Lending limits cap at $1,149,825 regardless of your home's actual value.
Proprietary jumbo reverse mortgages exist for high-value Santa Monica properties. Fewer lenders offer them and rates run higher than HECM products.
Counseling is mandatory before closing. You'll meet with a HUD-approved counselor who explains terms, costs, and alternatives.
Origination fees, mortgage insurance, and closing costs eat into available equity. Budget 2-5% of home value for upfront costs on reverse mortgages.
Santa Monica clients often assume they can tap full equity. Reality: a 70-year-old with a $3M home might access $700K-900K maximum through reverse mortgage.
We steer many toward HELOCs instead if they have income to qualify. Lower costs, more flexibility, and you keep the unused equity untouched.
Reverse mortgages make sense when you're house-rich but income-poor and plan to age in place. They're terrible if you might move in 5 years.
Heirs inherit the home but must pay off the loan balance or sell. That balance grows over time as interest accrues and compounds monthly.
HELOCs require monthly payments but cost far less upfront. You pay interest only on what you use, not the full available line.
Home equity loans give lump sums with fixed payments. Better if you need cash once and have income to cover monthly obligations.
Cash-out refinances work if rates are favorable and you want to reset to a 30-year term with lower payments than current mortgage.
Reverse mortgages win when you can't qualify for traditional loans due to limited income but need to access equity while staying put.
Santa Monica property taxes average 1.2% annually. On a $2.5M home, that's $30K yearly you must still pay with reverse mortgage proceeds or other income.
HOA fees in Ocean Park, Wilshire Montana, and North of Montana communities run $300-800 monthly. Reverse mortgages don't cover those ongoing costs.
Coastal properties face higher insurance costs and maintenance. Salt air, foundation issues, and deferred maintenance can trigger lender property inspections.
Prop 19 changed inheritance rules in California. Reverse mortgages complicate property transfers to children who may not qualify for property tax base retention.
Yes, but HECM loans cap at $1.15M. You'd need a proprietary jumbo reverse mortgage with higher rates and fewer lenders to access more equity.
The loan becomes due if you're absent over 12 consecutive months. You or heirs must repay the balance or sell the property.
No. You remain responsible for all property taxes, homeowners insurance, HOA fees, and maintenance costs throughout the loan term.
Yes, if they repay the reverse mortgage balance or refinance it. They typically have 6 months to decide and arrange financing.
Roughly 40-50% of home value up to the $1.15M HECM limit. A $2M home might yield $575K after paying off existing mortgages and closing costs.
No. Reverse mortgage funds are loan proceeds, not income, so they're not subject to federal or California state income taxes.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.