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Frequently Asked Questions

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Questions & Answers:
What is a Home Equity Conversion Mortgage (HECM)?
Answer: Home Equity Conversion Mortgage (HECM) is one type of reverse mortgage regulated by HUD. It allows a homeowner to convert a portion of the equity in his/her home into cash. Unlike a traditional home equity loan, the borrower is not required to make repayment as long as he/she occupies his/her home as the principal residence.
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What are the advantages of HECM reverse mortgage?
Answer: There are many advantages of HECM reverse mortgage and we will name a few in the following:

  • No credit qualification: No matter what your credit score is, it does not affect your eligibility for a HECM loan.
  • No income restriction: HECM does not have any minimum income requirement.
  • Free you from existing loans: It pays off your existing loans by using the proceeds from the HECM loan.
  • No more monthly payments: You do not have to make any monthly payment to repay the loan as long as you live at your home.
  • Monthly cash flow: You can receive a guaranteed tax-free monthly cash flow for your entire lifetime.
  • Line of credit: You may also have a credit line established and request money at any time for any purpose.
  • Limit on the amount you owe: No matter how much cash you have received during the course of the loan, you will never owe the lender more than the value of your home.
  • Use the money any way you wish.
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What is the minimum age requirement?
Answer: All the borrowers on the title must be at least 62 year of age.
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What is the role of the counseling agency? Is it required?
Answer: HUD is monitoring your interest carefully. For that reason, HUD requires all HECM borrowers receive counseling from a HUD-approved counseling agency.
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Can I apply if my existing loan is not FHA-insured?
Answer: Yes, as long as the appraisal shows that your home meets HUD's minimum property standard.
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What types of homes are eligible for a HECM loan?
Answer: Your home can be a single-family residence, a one-to-four unit building with one unit occupied by the borrower, a manufactured home (must have permanent foundation and must be installed), a unit in an FHA-approved condominium, or a unit in a PUD project.
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Do I have to live in my home?
Answer: Yes. However, if you need to be hospitalized or moved into a health facility, you may be absent from your home as long as you provide the appropriate notification as required by HUD and FNMA.
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Do I still have to continue making payments on my existing home loan?
Answer: No, you will NEVER have to make any monthly payment on your home anymore since Sun West will pay off your existing home loan out of the new HECM loan proceeds.
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Must the home be debt-free to qualify for a HECM loan?
Answer: No, a home that has an existing lien will qualify for a HECM loan as long as the proceeds of the loan are large enough to pay off existing mortgage(s) on your home.
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Why can't I just get a home equity loan?
Answer: With a traditional home equity loan, you must qualify for the loan and you are required to make a monthly mortgage payment. With HECM, there is no income or credit qualification required and you do not have to make any mortgage payments. This loan is primarily based on your age and the value of your home.
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How much money is available to me?
Answer: Lender calculates it based on your age, the interest rate, the value of your home, the county your home is located, the total closing costs, the amount of lien against your home and some other factors.
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Whose name does the Title remain?
Answer: Title of your home always remains in your name, NOT in the name of the lender. Lender has no interest in your home except for the amount you owe the lender.
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What if I am deemed to be mentally incapacitated?
Answer: Your spouse, or if not available, your appointed guardian will continue with the management of the loan.
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Can the title be held in the name of my trust instead of my name?
Answer: Yes, if it is revocable.
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How much does it cost to get this loan?
Answer: You practically have the same fees as in any other loan such as origination, appraisal, title, escrow, and the upfront mortgage insurance premium to HUD. All fees are regulated by HUD.
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Do I need an appraisal?
Answer: Yes, the value of your home is one of the most critical parameters in determining how much borrowing power you have.
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Do I have to pay these fees at closing?
Answer: Yes. However, most of these fees can be financed into the loan, which means that you do not have to come up with cash out of your pocket.
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What is the interest rate on the reverse mortgage and how is it determined?
Answer: Interest rate is set by Fannie Mae under HUD's guidelines. It is equal to the 1-year US Treasury constant maturity rate plus a margin, currently at 1.5%, for monthly adjustable HECM.
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Who pays the taxes and insurance?
Answer: You do. However, you may authorize us to do so if there are enough funds in the line of credit.
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Is the money from the HECM loan taxable?
Answer: No, it is tax-free. For further information, please contact your tax attorney.
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Will the money from the HECM loan affect my Social Security and Medicare benefits?
Answer: No, it does not affect Social Security and Medicare. For more information, please contact these agencies for your specific circumstances.
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How do I receive my payments?
Answer: There are five options you may choose:

  • Tenure - Equal monthly payments as long as at least one borrower continues to occupy your home as the principal residence.
  • Term - Equal monthly payments for a fixed period of months selected by you.
  • Line of Credit - Unscheduled payment at times and amounts chosen by you until the line of credit is exhausted.
  • Modified Tenure - Combination of a line of credit and monthly payments as long as at least one borrower remains in your home.
  • Modified Term - Combination of a line of credit and monthly payments for a fixed period of months selected by you.
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Can I use the payment from the lender to pay for hazard insurance?
Answer: Definitely! You will need to notify us as required by HUD/FNMA. Lender will pay the insurance premium directly out of the funds in the credit line.
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What if my financial need changes?
Answer: If you have money available in your credit line, you can request it any time for medical or personal need. You can also cut back or increase the monthly payment amount. There will be a minimal handling charge as regulated by HUD.
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Do I have to pay anything during the course of the loan?
Answer: No. However, you are responsible for paying the real estate tax, hazard insurance and flood insurance if applicable. You also need to maintain the condition of your home.
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Is there any prepayment penalty?
Answer: No. You may make a full or partial repayment at anytime without any penalty.
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What if the loan balance becomes greater than the value of my home?
Answer: No matter how large the loan balance becomes, you have the right to continue to live in the house. Lender cannot take over your home as long as it is your principal residence. Besides, you will NEVER owe the lender more than the value of your home. HUD will pay the shortage for you, if there is any.
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What happens if I die? Will the lender be taking my house?
Answer: No. After you pass away, your heirs may pay the loan balance in full by cash or by refinancing the debt and they can keep your home.
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What happens if I move out of my home?
Answer: The HECM loan becomes due and payable as soon as your home is no longer your principal residence.
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Are there other situations in which my loan will become due and payable?
Answer: Yes. Two of the other situations in which the HECM loan may become due and payable are:

  • You fail to pay real estate tax or hazard insurance.
  • You fail to maintain your home in acceptable condition.

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Is there a time limit for my heirs to liquidate my home and payoff the lender after I die?
Answer: Your heirs should pay the debt in full or liquidate your home within 30 days after the Repayment Notice is issued. Otherwise, the servicer will initiate foreclosure proceedings within 6 months of the Repayment Notice.
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How is the lender paid?
Answer: The lender is paid at the time when the loan becomes due and payable, for example, when you sell your home. The lender will receive a payment from your heirs or sale proceeds of your home.
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How much will be owed when the loan is due and payable?
Answer: The total loan balance will include all the payments to you, the accrued interest, accrued mortgage insurance premiums, servicing fee, and other costs such as closing costs or repair fee financed as part of the loan balance. Note that the repayment amount will never exceed the appraised value of your home when your loan becomes due.
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Consumer Home Loan Mortgages

Consumer Home Loan Mortgages

SWMC offers a wide range of residential home loan mortgage programs to suit different situations such as a purchase, refinance, a property rehabilitation loan or a reverse mortgage at the competitive interest rates.

FHA Purchase at 96.5% Financing, Streamline (Interest Rate Reduction) Refinance, and Cash-Out Refinance, 203(k) Rehabilitation Loan, 203(k) Streamlined Rehabilitation Loan, and the Home Equity Conversion Mortgage (Reverse Mortgage) and USDA Rural Housing mortgages.

If you are a Veteran, Sun West offers you VA guaranteed mortgages for Purchase Loans at 100% Financing, Cash-Out Refinance, and Streamline Interest Rate Reduction Refinance Loans (IRRRL).

You can use our simple mortgage calculator tools to find out your monthly payment, the house you can afford, your refinance options, or the home equity you may be able to access through a reverse mortgage (HECM).

As a full-service mortgage bank, Sun West is one of the few approved direct lenders to provide in-house origination, processing, underwriting, closing, funding, and servicing. Based in California with active presence across the country, Sun West is dedicated to offering exceptional service coupled with integrity, reliability, and experience.

Read More About Consumer Home Loan Mortgages >>
Mortgage Partner Services

Mortgage Partner Services

You can become a partner with Sun West as a Wholesale Mortgage Broker or a Correspondent Lender.

In addition to residential mortgage lending, Sun West also offers FHA multifamily,commercial and portfolio lending services.

As a partner you have access to SunSoft - Sun West's state-of-the-art mortgage loan origination and servicing software. Built on over 30 years of lending and mortgage technology experience, SunSoft is compliant with federal and state requirements.

Sun West is approved by Ginnie Mae as an Issuer, Servicer and Participation Agent. This rare approval enables us to issue securities backed by the full faith and credit of the United States. Consequently, Sun West is able to offer its partners and borrowers the competitive interest rates in the market.

Read More About Wholesale Lending >>

Read More About Correspondent Lending >>
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Mortgage Loan Calculators

Loan Calculators

  • FHA Purchase Calculator
    Calculates the monthly mortgage payment for your home purchase loan, as per prevailing interest rates.
  • Reverse Mortgage Calculator
    Calculates and compares the available options for HECM products.
  • Monthly Payment
    Calculates your payment for different loan amounts, interest rates, and amortization terms.
  • How Much Can I Afford?
    Calculates your maximum mortgage loan amount based upon the monthly home loan payment, interest rate, and term that you enter.
  • Should I refinance?
    Just enter information about your current mortgage loan and the new loan you're thinking of taking, and we'll calculate your savings.

  • Estimated Cost for an appraisal
    Just enter basic information about the loan and property type, and we'll calculate the estimated cost of an appraisal.
Mortgage Partner Resources

Partner Resources

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Press Releases

Press Releases

  • 08/20/2015: Sun West Mortgage Company, Inc. Named Million Dollar Lender by USDA Rural Development Read More..
  • 07/15/2014: Ivan 'Pudge' Rodriguez to Make His Debut at the 25th Annual American Century Golf Championship, Sponsored by Sun West Mortgage Company, Inc. Read More..
  • 07/1/2014: USDA Rural Development Names Sun West Mortgage Company, Inc. Lender of the Year Read More..
  • 04/28/2014: FHA 203(k) and PowerSaver Loan Offerings From Sun West Mortgage Company, Inc. Extended With New FHA PowerSaver 203(k) Program as a Single Home Improvement Solution for Homebuyers Read More..
  • 02/24/2014: Sun West Mortgage Company, Inc. Continues National Expansion Read More..
  • 07/23/2013: Sun West Mortgage Company, Inc. Offers Homeowners Access to the Hardest Hit Fund Relief in All Eligible States and D.C. Read More..
  • 05/15/2012: Sun West Mortgage Company Partners with EGIA to Introduce the FHA PowerSaver Loan Program Read More..
  • 12/16/2011: Sun West Mortgage Company and the Cerritos Sheriff Station team up to supply little boys and girls toys this holiday Read More..
  • 10/03/2011: Sun West Mortgage Increases Its Reach in New Jersey Read More..
  • 4/22/2011: Variable Servicing Margins on Different Participations of the Same Loan for HMBS Issuers Announced by Sun West Mortgage Read More..
View All Press Releases >>
Lender Alerts

Lender Alerts

  • 3/2/2017: Sun West Introduces SeeMyLoanStatus Read More..
  • 2/22/2017: Close more Loans: Reduced Overlay on Conventional Loans Read More..
  • 2/13/2017: Disaster reported by FEMA in the state of Louisiana Read More..
  • 2/13/2017: Presidents' Day Closing Notice 2017 Read More..
  • 2/1/2017: Disaster reported by FEMA in the states of Georgia and Mississippi Read More..
  • 1/10/2017: Martin Luther King Jr. Day Hours of Operation Read More..
  • 1/9/2017: Non-Agency Premium Loan Programs Read More..
  • 12/28/2016: Sun West’s Implementation of Truth in Lending (Regulation Z) ​Annual Threshold Adjustments Read More..
  • 12/23/2016: 2017 Loan Limits for Government Loan Programs Read More..
  • 12/23/2016: New Year's Holiday Hours of Operation Read More..
View All Lender Alerts >>
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