||November 2, 2006|
Your Local Reverse
I have dedicated all of my columns to the regular, conventional FHA reverse mortgage program. I would like to tell you about the jumbo product that is available. It has undergone some re-vamping and was released last month. The program used to be utilized for homes valued at $1 million or more, but now is helping many seniors who have homes valued at $500,000 and higher. Homes valued at $500,000 up to $1 million were bound by the same lending limit of $362,750 set by FHA. That, in turn, left a lot of equity that the senior couldn't utilize.
Recent improvements and additions to these proprietary reverse mortgages make them even more attractive. There's more in this program for you:
• More cash, with virtually no loan limit or maximum home value
• More flexibility, with options that eliminate upfront fees and closing costs.
• More ways to free up the equity in your home and get tax-free cash* for what you want or need.
This program allows you to tap into more of your home equity because, unlike traditional reverse mortgages, there are virtually no limits on the value of your home or the loan amount. This product provides a higher available loan amount and a lower interest rate to the borrowers. This way, you can receive substantially more cash than is possible with other reverse mortgages. A special six-month introductory rate makes this program even more desirable.
The Advantage program features a number of options that allow you to maximize the benefits depending on your unique needs, including eliminating upfront fees and closing costs. I can explain all the details and help you determine what combination of options is best for you.
Credit Line Option
Your origination fee is 2% of the Initial Advance limit. You pay all third-party closing costs. You can draw as little as you want or as much as your Initial Advance Limit. Minimum draw after closing is $500.
When you draw 75% of the maximum available amount (a minimum of $200,000), you pay no origination fees. Third-party closing costs are still your responsibility.
Cash Out Option
With this option, pay no origination fees or closing costs (excluding state or local taxes). The required draw at closing is 100%, and with a minimum of $275,000 for the origination fee and closing costs to be waived.
Equity Choice Feature
Available for all Advantage options, this allows you to limit the loan obligation to a stated percentage of the full market value of the home. As a result, the amount of the loan or line of credit will be less than the amount for which you would otherwise qualify. Choose to protect a minimum of 10% and a maximum of 50% of your home equity to assure a percentage of equity to benefit your or your heirs upon loan maturity.
Remember, I am available to review your reverse mortgage options with you privately. This is a wonderful program, but sometimes it's not the right option for my client. The way I discover if a reverse mortgage is right for you is to present the numbers and ask the right questions. If it's not the right option for you, I will be the first to say it. Believe me, my goal is to have a happy client when the transaction is complete. I work very hard to put a smile on my seniors' faces and money in their pockets. Please call me if you are looking into a reverse mortgage. I'm close by…