Reverse Mortgage Products

There are several different reverse mortgage products and most every lender offers each.

HECM - The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage insured by the federal government. HECM loans are insured by the Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD). FHA tells HECM lenders how much they can lend you and also limits the loan costs. FHA also guarantees that lenders will meet their obligations.

This program provides four different draw options: 1) lump sum cash, 2) line of credit, 3) monthly income for life or for a fixed term, or 4) a combination of the above three.

• Maximum Lending Limit- ranges from $172,632 to $362,790 (adjusts annually) depending on where the borrower is located.
• Government Insured Program.
• Variable T-Bill interest rate plus margin is adjusted monthly (1.50 margin) or annually (3.10 margin).
• Available balance in Line of Credit grows annually.
• Monthly servicing fee is added to the loan balance.
• Counseling is required by an approved HUD counselor.

• Maximum Lending Limit $417,000 (adjusts annually).
• Government Sponsored Enterprise Program.
• Variable CD interest rate plus margin of 3.40 is adjusted monthly.
• A monthly servicing fee is added to the loan balance.
• Counseling is required by an approved HUD counselor.
• NO Mortgage Insurance Premium (MIP) charged.
• Line of credit has NO growth rate.

• No maximum home value or loan limit.
• 6 month introductory rate (6 month LIBOR [index] plus margin of 4.5)
• Lifetime interest cap is 6% over the initial annual percentage rate (this would be calculated with the 6 month LIBOR plus margin of 5%).
• No equity or appreciation sharing and no maturity fee.
• Follows same eligible home guidelines as HECM and Home Keeper programs.
• Servicing fee is automatically financed on the account monthly.
• Counseling is also required on this program but is completed by an independent counselor.
• Minimum home value is $75,000.
• This program is NOT available in all states.
  
  With the Cash Account there are 3 program offerings:
  
  Standard Option
  • Origination fee is scaled percentage of home value to a maximum of 1.5%.
  • Open-ended revolving line of credit.
  • Unused line of credit grows by 5% annually.
  • Minimum draw is $500.
  Zero Point Option
  • No origination fee collected.
  • Required to draw 75% of the available funds at closing to qualify.
  • Minimum draw after closing is $500.
  • Unused line of credit grows by 5% annually.
  • Closing costs - Third-parties are capped at $3,500 (this excludes applicable state and local taxes, if any).
  • No prepayment penalty. Partial prepayment not allowed on minimum draw at closing for the first 5 years. Full payment is permitted.
  Simply Zero Option
  • No origination fee collected.
  • Required to draw 100% available funds at closing to qualify.
  • NO CLOSING COSTS (excluding state and local taxes, if any).
  • No prepayment penalty. Partial prepayment not allowed for first 5 years, full payment permitted.