In the past, when inquiring about reverse mortgages, the paperwork would be prepared right away. Now, things are different. You must first consult with a HUD-approved counselor before the HECM application can proceed. A couple receiving counseling in Rancho Cucamonga was also curious about this process.

Looking at it step by step, there are three main things to check. First is the age and residency requirement. The applicant must be at least 62 years old, and the home must be their primary residence. Second is the existing mortgage balance. If there is an outstanding loan, it must be at a level that can be paid off with reverse mortgage funds. Third is the financial assessment. This evaluates whether the applicant can continue to pay property taxes and insurance premiums.

According to Zillow, the average home value in Rancho Cucamonga in June 2026 is $779,614, which is a 1.1% decrease from the previous year. The longer you have owned your home, the more equity you have, so if you meet the three requirements, the amount of funds you can access increases.

A reverse mortgage is a product that allows homeowners aged 62 and older to receive funds using their home equity as collateral. You can receive funds from the lender in a lump sum, monthly payments, or a line of credit, and the principal and interest are settled when the home is sold, the homeowner passes away, or the home is no longer used as the primary residence. The HECM, which is insured by the Federal Housing Administration, is the only type that the government guarantees.

The fourth thing to check is how you will receive the funds. You can choose from a lump sum, monthly payments, or a line of credit. The line of credit increases as you use less, so during the counseling process, you will discuss which option suits your situation best.

The eighth consideration is the amount you can receive. It is determined by age, home value, and the interest rate at the time of application. The older you are, the higher the home value, and the lower the interest rate, the larger the limit. You can receive an estimated amount based on your conditions during the counseling process.

One advantage is that in a non-recourse structure, if the home value falls below the loan balance, heirs are not required to pay the excess, and you can secure cash flow without monthly repayment burdens.

The items to check do not end with eligibility requirements. You also need to consider costs. When you add the origination fee, the initial mortgage insurance premium of around 2%, and closing costs, the initial expenses are higher than a regular mortgage. It is also essential to know that as time goes on, equity decreases, reducing inheritance assets, and if you cannot continue to pay property taxes and insurance premiums, there is a risk of default.

The seventh thing to check is the specifics of the financial assessment. It looks at credit history, income, and expenses comprehensively. If there is a history of tax payment delinquencies, a portion of the loan may be set aside for property taxes and insurance premiums.

The average property tax rate in California is about 0.71%, but this figure includes existing owners who are locked in at lower rates due to Prop 13. Recently purchased homes or those pending reassessment typically face rates between 1.1% and 1.3%. The population aged 65 and older in California makes up 16.5% of the total, so households that need to check these requirements are steadily increasing.

The fifth consideration is post-processing. If the owner passes away, heirs can choose to sell the home to settle the loan, pay off the balance and keep the home, or transfer the home to the lender. The sixth consideration is what to be cautious of. Exaggerated advertisements or pressure tactics targeting the elderly should raise suspicions of fraud.

HUD counseling is not a formal procedure. It is a practical process that outlines costs and alternatives tailored to individual situations. After that counseling, I hope you discuss it again with your family and make a decision.

The ninth consideration is the counseling itself. HUD counseling can be done in person, over the phone, or online. After the counseling session, a certificate is issued, and this certificate is required to proceed with the loan application. Counseling fees vary by region and organization but are generally not significant.

From my long observation, hasty decisions often lead to regret later. It is not too late to take your time and check things out.