SCCU Reverse Mortgage

Member Situation

A Sierra Central CU Member’s (Sandy) home burnt down in Camp Fire in 2018. Sandy is over 62 years old and inquired about a reverse mortgage through the Paradise branch to pay off the construction loan that was needed to rebuild her home in Paradise.

When I met with her in late October of 2023, she had been living in temporary housing 45 miles away since then. As we discussed her plight, she was having difficulty finding financing to pay off the construction loan. One of the reasons was her only income was from Social Security. The other was, for her to qualify for the construction loan, she needed a co-signer with enough income. Her daughter’s boyfriend, Bill, agreed to help out and do it. The construction loan lender also required that Bill was put on title of the home.

When it came to Sandy qualifying for a reverse mortgage, this posed a hurdle. In particular, the amount a borrower can qualify for on a Reverse Mortgage is based on three factors:

  1. age of the youngest borrower if there are two borrowers
  2. home value
  3. interest rate

Because Bill was so much younger than Sandy, the amount of the Reverse Mortgage now was going to be less than the amount needed to payoff of the construction loan. Sandy didn’t have the extra funds to make up this short fall and she wasn’t qualifying by herself based on her Social Security income alone. We continued the loan process in hopes that the appraisal would come in higher than we expected.

Fortunately, it did. This allowed her to not just pay off the construction loan, but it gave her an additional amount of a Line of Credit. For qualifying a Reverse Mortgage borrower, we can use that extra Line of Credit as income to get her to qualify for the loan by herself. The only other thing necessary was to take Bill off Title when the loan closed. We received final approval for the Reverse Mortgage on Christmas Eve and we closed the loan shortly thereafter.

Benefit to the borrower:

  1. Construction loan was paid off with a Reverse Mortgage, when the other options looked pretty dismal.
  2. SCCU member now has a completely rebuilt new home with no Principal and Interest payment.
  3. Sandy qualified on her own which allowed for Bill to be removed from title. Qualifying on her own was impossible with any other loan, other than a reverse mortgage.

Here is her published review of our services:

Tim and team were amazing. Tim went more than the extra mile for me. He drove 2 hours, to my house, multiple times and closed during the Christmas holidays. My loan was not typical or easy, but Tim never stopped working on it. He is definitely the best!!!