If you own a home in California, you’ve probably heard about reverse mortgages and traditional mortgages. But what do they really mean? And which one might be right for you in 2025? Here’s a simple breakdown.
1. How They Work
- Traditional Mortgage: You borrow money to buy a home and pay it back each month until it’s paid off.
- Reverse Mortgage: Usually for older homeowners (62+), the bank pays you using the value of your home. You don’t make monthly payments, but the loan is paid back when you move out, sell the home, or pass away. You can learn more by checking out our Reverse Mortgage FAQ’s page.
2. Who Can Get Them
- Traditional Mortgage: Almost anyone 18 or older can apply. The bank will check your income, debts, and credit score.
- Reverse Mortgage: You must be at least 62 (sometimes 55 for special loans), live in the home as your main residence, and have a lot of home equity (usually half or more of the home paid off).
3. Loan Amounts in 2025
- Reverse Mortgages backed by the FHA (called HECMs) now have a loan limit of $1,209,750 in 2025 — the highest ever.
- Jumbo reverse mortgages (for high-value homes) can go over $4 million, but these often have higher interest rates.
- Traditional Mortgages depend on your home price, location, and income.
4. Paying the Loan Back
- Traditional Mortgage: You make monthly payments until the loan is gone.
- Reverse Mortgage: You don’t make monthly payments, but interest is added to the balance each month. This means the amount you owe grows over time and your home equity goes down.
5. Costs & Rules
- Traditional Mortgage: Lower starting costs and fewer fees.
- Reverse Mortgage: Higher upfront costs (closing costs, insurance, origination fees). You must still pay property taxes, homeowners insurance, and keep up with home maintenance.
- For reverse mortgages, you must talk with a HUD-approved counselor before getting the loan so you understand the risks.
6. What You Can Use the Money For
- Traditional Mortgage: Mainly for buying or refinancing a home.
- Reverse Mortgage: You can use the money for anything — covering bills, fixing your home, paying for healthcare, or simply boosting your income.
Quick Comparison
| Traditional Mortgage | Reverse Mortgage | |
|---|---|---|
| Age Requirement | 18+ | 62+ (or 55+ for some) |
| Monthly Payments | Yes | No |
| Loan Limit (2025) | Varies | $1.2M FHA / $4M+ jumbo |
| Best For | Buying a home | Accessing home equity |
| Main Risk | Falling behind on payments | Losing equity over time |
Why This Matters for Californians in 2025
- Home values in California are high, so reverse mortgage limits going up means more homeowners can tap into their equity.
- Reverse mortgages can be a lifeline for retirees who want extra income without selling their home.
- Traditional mortgages are still the go-to for buying homes or refinancing at better rates.
- Choosing the right one depends on your age, income, and long-term plans.
Whether you’re curious about tapping into your home’s equity with a reverse mortgage or exploring a traditional loan, the right choice depends on your unique needs and goals. The team at ILG Home Loans knows California’s housing market inside and out, and we’re here to guide you every step of the way. Reach out to our mortgage pros today for clear answers, personalized options, and expert advice to help you make the best decision for your future.
Thinking About a Mortgage Refinance or Reverse Mortgage? Connect with us today!
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Reviews
Nick is the absolute best! We have used him multiple times over the years for home loans for both purchases and refis. This last time, our escrow agent even commented on how great he was to work with. She said he was fantastic and that our rate was the lowest she has seen in this season!
Thanks again so much Nick, you really worked hard for us on this complicated transaction! We saw that the whole way, from beginning to end and we are very thankful!
Thanks again so much Nick, you really worked hard for us on this complicated transaction! We saw that the whole way, from beginning to end and we are very thankful!
Nick is the consummate professional and leaves no stone unturned in working through the issues of loan processing. He was instrumental in working through the questions raised in the processing of my application. I can highly recommend his services!
The whole process of buying a home is extremely overwhelming. I truly could not have asked for a better person to assist me than Nick. He sets a deadline and exceeds it, he goes above and beyond with communication and he gets things handled. 10/10 recommend – I wouldn’t go with anyone else.
I would highly recommend Anthony Ingoglia for all loan needs. I have known him for many years and he has always delivered effectively and efficiently. I give him a 5 star rating. He is very transparent and kept me informed throughout the loan process. A professional you would love to work with.Thank you Anthony !
Anthony is outstanding! He has handled all my loans for close to 20 years now. I will not let anyone else handle home loans or refinances. He is knowledgeable, transparent, communicates regularly and consistently, looks out for your best interest and is just overall a great person. You will be pleased with your experience. I highly recommend you use him for all your loan needs.
I had an exceptional experience working with Nick and Anthony during my loan process. From start to finish, they were incredibly helpful, patient, and thorough. They took the time to explain every detail, answered all my questions, and made sure I fully understood each step. Thanks to Nick and Anthony their hard work, I was able to secure the loan I needed quickly and without hassle. I highly recommend the “Integrated Lending Group” to anyone in need of a loan or financial guidance.
I had an exceptional experience working with Nick and Anthony during my loan process. From start to finish, they were incredibly helpful, patient, and thorough. They took the time to explain every detail, answered all my questions, and made sure I fully understood each step. Thanks to Nick and Anthony their hard work, I was able to secure the loan I needed quickly and without hassle. I highly recommend the “Integrated Lending Group” to anyone in need of a loan or financial guidance.
Nick at ILG brought value and prompt service to our complicated situation throughout the whole process. We got what we wanted out of it and made us feel at ease. The education is priceless.
would definitely recommend his services. Thank you.
would definitely recommend his services. Thank you.
Working with Nick is always a pleasure, he’s honest and a great guy. Nick walks you through the process and answers any questions you have. I would recommend him to everyone !
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