Reverse Mortgages and Accessory Dwelling Units - How to Finance A Grannie House

Reverse mortgages and accessory dwelling units in the same sentence? Yes. This is just another way on how to finance a grannie house.

If financing is required to build the grannie house, qualifying for the loan can be difficult depending on the situation. For a HELOC or home equity line of credit, or a cash out refinance conventional loan, income qualifying is required. When you are retired and your monthly income has dipped, it can be difficult when it comes to income qualifying.

A reverse mortgage doesn't require a monthly mortgage payment to be included in the qualifying process making it much easier to income qualify. You can learn more about how to income qualify for a reverse mortgage by clicking on this URL https://californiareversemortgage.biz/how-to-income-qualify-for-a-reverse-mortgage/

The reverse mortgage isn't interest free, by not making a monthly reverse mortgage payment, the interest that accumulates each month that goes unpaid gets tacked on to the loan balance and gets collected once the home sells, the loan gets refinanced or the last living borrower on the loan passes away. However, you can make reverse mortgage monthly payments to pay back the borrowed money, as often as you like, and in any amount. For homeowners looking for rental income via the ADU, this comes in handy while you use the reverse mortgage funds to build the ADU and not have any rental income coming in. If you used HELOC or Conventional loan funds to build the ADU, monthly mortgage payments are required to pay those funds back which could put a crimp on cash flow.

It's a little known fact on reverse mortgages, if you already have a low interest rate on your existing first mortgage and don't want to refinance that rate, there's even a second mortgage reverse mortgage where you can access funds to build the ADU and that loan as all other reverse mortgages, has a no monthly payment option to pay it back either.

The HECM reverse mortgage has a line of credit option. Where you can borrower from it as you see fit, or in increments which is perfect for home remodeling in that interest accumulates only on the portion of the credit line that you have used. The second mortgage reverse mortgage is a one-time lump sum disbursement, so all the funds start earning interest from day one.

There must be an abundance of home equity in your owner-occupied home and the minimum age is 55 as part of the qualifying for a California reverse mortgage. Not all states carry the second mortgage reverse mortgage, however the HECM reverse mortgage program is available nationwide.

I was born, raised and still live in California and only originate the California Reverse mortgage in my home state.

If you have any questions or would like to type in your scenario, you can click this URL to fill out your scenario, https://californiareversemortgage.biz/contact-me-today/ I will get back to you ASAP.
Kind regards,
Kevin Walton
C2 Reverse
805-276-1942
This information is not intended to be a substitute for legal, tax or financial advice. Consult with a qualified attorney, accountant or financial advisor for additional legal or tax advice. These materials are not from HUD or FHA and were not approved by HUD or a government agency.
* There are some circumstances that will cause the loan to mature and the balance to become due and payable. The borrower(s) must continue to pay for property taxes and insurance and maintain the property to meet HUD standards or risk of default.. Credit is subject to age, minimum income guidelines, credit history, and property qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change.
Kevin Walton
NMLS #245923
C2 Reverse Mortgage Corporation
12230 El Camino, Suite 100, San Diego, CA 92130

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Kevin Walton, Residential Mortgage Loan Originator, NMLS #245923 // C2 Financial Corporation NMLS #135622
Kevin Walton, Residential Mortgage Loan Originator, DRE #, 01453270//C2 Financial Corporation DRE#, 01821025
Corporate: 858-312-4900 // www.c2financialcorp.com/
kwaltonucf@verizon.net
Kevin’s cell: 805-276-1942
This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker # 01821025: NMLS # 135622. Loan approval is not guaranteed and is subject to lender review of information. Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender. The services referred to herein are not available to persons located outside the state of California.

As a broker, C2 Financial Corporation is NOT approved by the FHA or HUD, but C2 Financial Corporation is allowed to originate FHA loans based on their relationships with FHA approved lenders.