REVERSE MORTGAGES

There are two basic types of Reverse Mortgages

The two most popular types of reverse mortgages are the FHA insured "HECM"  mortgage and a proprietary banker reverse product. They both have their advantages and disadvantages depending on your individual situation or needs. Both loan products require a minmum age of 62 for the borrower(s).

Both products require that the borrower demonstrate that the homeowner has the ability to maintain the property and pay the taxes and insurance.


HECM REVERSE LOAN:


1) Offers option of  a line of credit, lump sum distribution , monthly disbursement or combination of these choices.

2) Loan amount calculations are limited by FHA max loan calculations which eliminates many higher value properties.

3) FHA HECM loans require an upfront mortgage insurance premium, currently 2% of the max loan amount which makes the cost of obtaining credit very high(but it is financed).


PROPRIETARY(BANKER)REVERSE MORTGAGE:


1) Traditionally works better with higher value properties with loan amounts up to 2 million dollars

2) Max loan amount calculations are more conservative than HECM, but again much larger loan amounts.

3) No mortgage insurance(MIP) required resulting in very low loan cost.


GOING FORWARD:


1)  You need some baseline information. After a chat I can provide you with a printed brochure that details several options based upon our discussion of your needs and desires.

2) The next step is to receive independent counselling from a neutral 3rd party. The  information I provide you will list ten local agencies or you are free to pick your own.


Finally:


The requirements and and regulations for these loans constantly change and evolve  based on market conditions. I have been a FHA approved  lender since  1994. I understand the different products and will happily explain the options available to you.


Please contact me anytime at my office 818/541-0900 or cell 818/631-4907.


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