There are several different reverse mortgage products.

I. HECM, Reverse Mortgage Program

II. Fannie Mae Home Keeper

III. Cash Account (Lender Specific)

I. HECM, Reverse Mortgage Program

The Home Equity Conversion Mortgage (HECM) is the most popular of all Reverse Mortgage Programs. It is a federally insured product & gives added comfort & security to senior clients. HECM is the not only the most popular, but the oldest loan product. The HECM accounts for 90-95% of all Reverse Mortgages made. The HECM often provides quite a bit more cash than the other programs and provide you with the most flexibility to receive cash paid to you. You can get up to 5 choices to receive HECM payments. A very popular choice with Seniors who like its variety. The terms can even be changed after your loan closes. All rates charged are either monthly or annually. However, be assured the adjustments do not alter the monthly payments that you receive, if you chose the monthly payments option. Once the interest rate adjustment period is established, at the loan closing, it will not change.

A partial payment may be made without penalty. If the repayment is made in full, the loan agreement is terminated. All HECM loans require counseling by an outside HUD approved agency. The session is free and is very helpful to determine if a reverse mortgage is right for you. No expense of any kind is incurred until the counseling session is completed. We cannot proceed with any processing of your reverse mortgage until we receive the signed original counseling certificate. After receiving the certificate, an appraisal procedure is then completed. Most often this is paid for by the client when the 3rd party appraiser arrives and is the only basic out of pocket incurred.

II. Fannie Mae Home Keeper

Fannie Mae is the nation’s largest provider of mortgages. The Fannie Mae Home Keeper was designed primarily for the use of the next home purchase. Under this program, the senior would receive a large amount of cash, (to use) and have no monthly payments. This large cash disbursement of cash would be used by the buyer to use some of the proceeds from the sale of his/her previous home for a large down payment. Any additional funds would be used to go into savings or pay off debt.

As with all reverse mortgages, the Home Keeper is an adjustable rate mortgage. The great part about Home Keeper is that it allows you to obtain a new home and a Reverse Mortgage all in one single deal. Voila! This allows less out of pocket money and still eliminates monthly payments. Click here for more information!

This loan product is very attractive for seniors who would like to move closer to their children or others, or no longer want to live an area congested with crime, or return to the roots of their childhood.

III. Cash Account (Lender Specific) 

Strong growth in Home Values have increased tremendously over the last several years and many Seniors are setting on tons of Equity that resulted from strong demand in the housing market. The Cash Account Advantage was created to allow Senior homeowners to take advantage of this equity growth, since HECM & Home Keeper products are hampered by lower loan limits.

Below is a recap of the New Advantage Plan:

• Virtually no maximum home value or limit
• Lifetime interest rate cap
• No equity sharing or appreciation sharing and no maturity fee
• Proceeds/Advances are not taxable
• Loan is non-recourse to the borrower
• Servicing fee is automatically financed on the account monthly
• Most home types are eligible
• Counseling is done independently
• Minimum home value is $75,000

The Cash Account allows the borrower to limit the loan obligation to a stated percentage of the full market value of the home, resulting in the amount of the loan or line of credit being less than the amount for which the borrower qualifies, which protect a minimum or 10% and a maximum of 50%. This assures greater flexibility that a percentage of the equity remaining will go to benefit the borrower or their heirs upon maturity.