North Coast Financial is a direct hard money lender able to provide funding to refinance reverse mortgages for heirs in California. A reverse mortgage refinance is a financing tool often used by heirs who wish to maintain ownership of a reverse-mortgaged home they have inherited. The title of the property may be in the name of an estate and going through probate or be owned by a trust. Refinancing a reverse mortgage through a conventional lender such as a bank or credit union is generally not possible as conventional lenders will not provide a loan to an individual whose name is not on title of the property.

North Coast Financial is one of the top hard money lenders in California with over 40 years of experience. Offering quick approval and funding, very competitive rates and professional service, North Coast Financial has proven to be a reliable direct hard money lender able to fund various types of hard money loans. Contact North Coast Financial now to get a hard money reverse mortgage refinance loan funded fast.

North Coast Financial is able to refinance reverse mortgages for heirs in San Diego, Los Angeles, Orange County, San Francisco Bay Area, Ventura, Sacramento, Riverside, Temecula and other cities and counties throughout the state the California.

What Happens if you Inherit a House with a Reverse Mortgage?

If you inherit a house with a reverse mortgage the reverse mortgage will need to be paid off as soon as possible. Reverse mortgage companies have a bad reputation for being very aggressive once the original borrower has passed or moved out of the property. The reverse mortgage foreclosure timeline will vary based on the specific reverse mortgage company.

Reverse Mortgage Problems for Heirs

A reverse mortgage can create problems for heirs as there are only a few choices available for resolving the issue. The reverse mortgage becomes the heir’s responsibility and must resolved within a specified amount of time. If the heirs do not act, eventually the reverse mortgage company that has a loan against the property will force the sale of the property through a foreclosure trustee sale as they are entitled to do. If the property sells at the trustee sale, the reverse mortgage will be paid off and the heirs/estate/trust will receive any remaining funds above the current balance owed to the reverse mortgage company. Having a property sold at a foreclosure trustee sale will not result in receiving the highest sales price for the property.

Options for Heirs of Reverse Mortgage Inherited Property

The property can be put on the real estate market which will result in obtaining the highest price and having the reverse mortgage paid off. Selling a house with a reverse mortgage works just like any other home sale. The buyer of the property will not have an issue with the property having a reverse mortgage against it. The reverse mortgage is simply paid off through the purchase escrow when the buyer completes the sale.

The heirs also have the option of paying off the reverse mortgage with cash but few heirs have the ability to do this. If the heirs wish to keep the property they can also consider refinancing the reverse mortgage with a specialized lender such as probate and estate lender or a trust lender who are considered private money lenders or hard money lenders.

Conventional lenders are typically not able to refinance reverse mortgages on properties that have been inherited. This is because the title of the property is often in the name of an estate or a trust, not the heir’s name who is requesting the refinance for the reverse mortgage.

Reverse Mortgage Probate in California

A reverse mortgage on a probate property can present a challenging problem. The reverse mortgage typically needs to be paid off before the probate can be closed but conventional lenders cannot lend against a property in probate so the existing reverse mortgage can be refinanced. Unless the heirs of the estate want to sell the property to pay off the reverse mortgage there won’t be many other options available. Specialized probate lenders can provide a reverse mortgage probate loan to refinance the property. Once the probate is closed and the property is transferred into an individual’s name the reverse mortgage probate loan can be refinanced into a long-term conventional mortgage.

How Heirs Can Refinance a Reverse Mortgage

Since conventional lenders are not able refinance a reverse mortgage in most situations, heirs are left with few options. Thankfully there are private and hard money lenders able to refinance a reverse mortgage in California. The hard money lender is able to make a loan to the estate and then allow the loan to be assumed and personally guaranteed by the heirs. Once this loan transaction has been completed the title to the property will be in the name of the heirs. Now that the title is in the name of the heirs they will be able to refinance into a lower-cost conventional loan.

A reverse mortgage refinance from a hard money lender can be funded within a week or two. This is a huge benefit to heirs who finds themselves in a situation where the original reverse mortgage lender has proceeded with foreclosure, leaving the heirs with limited time to act.

Reverse Mortgages

Reverse mortgages (also known as a home equity conversion mortgage (HECM)) are available to homeowners who are at least 62 years old and own their home with no existing mortgage or a have a small mortgage balance relative to the value of the home. A reverse mortgage is a home equity loan that does not require monthly mortgage payments while the borrower/home owner is alive and lives in the property. When the reverse mortgage borrower sells the property, no longer lives in the home or passes away the reverse mortgage loan will become due.

A reverse mortgage cannot be assumed by a deceased borrower’s heirs. The heirs must either sell the property or refinance the reverse mortgage if they intend to keep the home. Heirs wishing to refinance the reverse mortgage may have up to 12 months to complete the refinance.

Lenders don’t immediately foreclose on homes with reverse mortgages upon the death of the borrower. Heirs have the opportunity to pay off the reverse mortgage, sell the property or refinance the reverse mortgage. Reverse mortgage lenders often allow the heirs 6 to 12 months. The heirs must show the reverse mortgage lender they are taking action to have the loan paid off.