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Perry Said:

Can you get downpayment assistance from the state of california or the federal govt for a reverse mortgage?

We Answered:

I think you do not understand reverse mortgages. If anyone tell you there are fees or a down payment needed for a reverse mortgage they are lies and cheats. Don't walk - RUN away from them! Reverse mortgages, however, are rarely a good idea.

Here is what is supposed happen - you enter into a reverse mortgage say at age 70 on a 100K house. They think you will likely live another 15 years at most and they offer to pay you $450 a month for life. If you live longer than that they keep paying, however, if you doe they get the house without making anymore payments to your estate. So if you die after 1 year you loose the house.

A better option in most cases is to simply take out fixed rate second mortgage and use some on the money to make payments. This get you money you need and also helps protect the asset for loss if you do not live as long as you hope.

You need to talk to a financial planner - check to see if you bank has one and make sure this is a good idea for you

Hector Said:

how comes that reverse mortgages have no fixed duration ? what if?

We Answered:

Q: how comes that reverse mortgages have no fixed duration ?
A: Reverse mortgages - like life insurance - are based on actuarial life expectancies. The older the borrower, the more they can borrow because there is less risk to the lender that the borrower will live a long time. The loan terminates when the homeowner/borrower dies, sells, or moves out. Reverse mortgages were originally designed to provide lifetime retirement income and this is "why" they have no fixed duration.


Q: what if you live long enough that the loan you are receiving on a monthly basis; exceeds the total home value ?!!!
A: One of the biggest "selling" points of reverse mortgages is that the borrower (or estate) can never owe more than the market value of the home at the time of loan termination. If the home owner dies with a reverse mortgage balance that totals $200,000, but the home can be sold for only $175,000, the FHA insurance that the borrower paid for (upfront and over the loan's life) picks up the difference.

Q: Also if your home os worth $ 700,000 in california, what is a good estimation on the amount of loan you recieve each month;

A: Use any of several online calculators to get a very good idea. You'll need other infor like homeowner(s) age and outstanding mortgage balance. Here's a good place to start:

http://www.top-reverse-mortgage-lenders-weekly-review.org/