Reverse mortgage and conventional refinance enable home exchange

March 30th, 2018 | Just Approved, Home Purchase, Reverse Mortgage

Mortgage Adviser: John Holmgren

Property types: Single-family homes in Berkeley

Price: Loan structure avoided tax reassessment

Loan amount: FHA HECM reverse mortgage $319,000 4.2% Conventional 30 year fixed refinance $679,650 4.125% No points

Backstory: John’s clients, father, and son, each owned single-family homes in Berkeley. The father’s home, a large family home, was larger than he needed and more than he could afford on his fixed income retirement benefit. In addition, his divorce settlement required him to make a substantial equity payment to his ex-wife. On the other hand, his son was living in a smaller home and wished to buy a larger home to accommodate his growing family, but was priced out of the competitive Berkeley market.

The clients alighted on the possible strategy of trading homes but had no idea how to make this work in a way that would work financially for both of them. The father’s financial advisor suggested that he contact John to try to come up with a solution. John suggested that they add each other to their home titles, physically switch homes, and then secure financing on their new homes.

To accommodate the situation with the father’s former home John arranged a cash-out refinance for the son to secure enough funds to pay off the father’s home loan and to pay the amount due to the father’s former spouse. To accommodate the father’s financial needs John arranged an FHA reverse mortgage on the father’s new home that paid off the son’s home loan and, since reverse mortgages require no monthly payments, solved the father’s cash flow problem.

John worked with the title company to make sure that all of this was done in such a way that neither party was subject to property tax reassessment. The result was affordable new homes for father and son!

Holmgren and Associates

DBA of Finance of America
4200 Broadway
Oakland, California 94611
Phone: 510-339-2121
NMLS 0910184/1071

Holmgren & Associates is a branch of Finance of America. We are a full service mortgage banker with an experienced staff offering expertise in residential mortgage lending, with primary focus on loans for home purchase, refinance, and reverse mortgages.

Find Us On:


©2019 Holmgren & Associates is a division of Finance of America Mortgage LLC |Equal Housing Opportunity | NMLS ID #1071 (| 300 Welsh Road, Building 5, Horsham, PA 19044 | (800) 355-5698 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act
Questions, comments, concerns? Send to 

This is not a commitment to lend. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states.  Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision.  Any materials were not provided by HUD or FHA. It has not been approved by FHA or any Government Agency.  A preapproval is not a loan approval, rate lock, guarantee or commitment to lend. An underwriter must review and approve a complete loan application after you are preapproved in order to obtain financing.  Questions, comments, concerns? Send to