ALL-NEW: Fixed-Rate Reverse Mortgage Line of Credit!Reverse MortgagesUpdated on Jan 2, 2019 View more like this | Visit ORANGE, CA | Contact All Reverse Mortgage |
For the first time ever, a new reverse mortgage is available that offers borrowers all the certainty of a fixed-rate loan as well as the flexibility of multiple payment options all in one product.
In years past, borrowers who opted for a fixed rate reverse mortgage were required to draw their loan proceeds in a single, upfront payment.
Today, borrowers have much more flexibility in choosing how they wish to receive the money from their reverse mortgages as a result of recent rule changes to the federal reverse mortgage program and the introduction of new loan products.
The HECM program
The most common reverse mortgages available on the market today are known as Home Equity Conversion Mortgages, or HECMs. These loans are insured by the Federal Housing Administration (FHA) and allow borrowers age 62 and older to “convert” their home equity into spendable cash.
There are no restrictions on how borrowers may use the cash received from their reverse mortgages. That means these proceeds can be used to cover expenses such as medical bills, home improvement projects, or to pay off any existing mortgage debt.
The amount of funds you can receive from your reverse mortgage is based on several factors, including your age, current interest rates and the appraised value of your home.
The FHA recently made changes to the HECM program, increasing borrower protections by safeguarding the amount a borrower can draw from their reverse mortgage within the first year following loan closing.
Today, you can draw up to 60% of your initial principal limit upon the closing of your reverse mortgage. If you have existing mortgage debt or other qualifying debt that exceeds 60% of your initial principal limit, you can take an additional 10% of your initial principal limit at the time of the loan closing.
A new reverse mortgage option lets borrowers access their full principal limit through an open-end line of credit, one year after loan closing.
The New Fixed Rate Reverse Mortgage
Still insured by the FHA, the newest line of reverse mortgage products that have become available this year offer a unique payment feature that allows borrowers to access their home equity through a fixed rate, open-end line of credit.
This new option gives borrowers the certainty of a fixed rate, along with the flexibility to make future draws on the loan proceeds over time.
Subject to the first-year cap of 60%, line of credit options let borrowers draw on the proceeds from their reverse mortgages at times and amounts they choose. This option is available in addition to other reverse mortgage payment plans including term or tenure payments, as specified at the time of the loan closing.
The new product option takes the line of credit functionality a step further by incorporating an open-end credit feature.
The open-end feature means you can borrow funds from your reverse mortgage via a line of credit and can then repay and access those funds again in the future, whereas under a closed-end credit line, you can only withdraw those funds once.
While adjustable rate reverse mortgages have historically offered this credit line feature, the new fixed rate product is the first ever to do so.
Other reverse mortgage products are still available, offering adjustable rate options with several different payment plan types. The HECM for Purchase is another option for borrowers who are looking to get a reverse mortgage and purchase a new home all within one transaction.
Article Source: https://reverse.mortgage/fixed-rate-line-of-credit
https://www.hud.gov/program_offices/housing/sfh/hecm/hecmhome
In years past, borrowers who opted for a fixed rate reverse mortgage were required to draw their loan proceeds in a single, upfront payment.
Today, borrowers have much more flexibility in choosing how they wish to receive the money from their reverse mortgages as a result of recent rule changes to the federal reverse mortgage program and the introduction of new loan products.
The HECM program
The most common reverse mortgages available on the market today are known as Home Equity Conversion Mortgages, or HECMs. These loans are insured by the Federal Housing Administration (FHA) and allow borrowers age 62 and older to “convert” their home equity into spendable cash.
There are no restrictions on how borrowers may use the cash received from their reverse mortgages. That means these proceeds can be used to cover expenses such as medical bills, home improvement projects, or to pay off any existing mortgage debt.
The amount of funds you can receive from your reverse mortgage is based on several factors, including your age, current interest rates and the appraised value of your home.
The FHA recently made changes to the HECM program, increasing borrower protections by safeguarding the amount a borrower can draw from their reverse mortgage within the first year following loan closing.
Today, you can draw up to 60% of your initial principal limit upon the closing of your reverse mortgage. If you have existing mortgage debt or other qualifying debt that exceeds 60% of your initial principal limit, you can take an additional 10% of your initial principal limit at the time of the loan closing.
A new reverse mortgage option lets borrowers access their full principal limit through an open-end line of credit, one year after loan closing.
The New Fixed Rate Reverse Mortgage
Still insured by the FHA, the newest line of reverse mortgage products that have become available this year offer a unique payment feature that allows borrowers to access their home equity through a fixed rate, open-end line of credit.
This new option gives borrowers the certainty of a fixed rate, along with the flexibility to make future draws on the loan proceeds over time.
Subject to the first-year cap of 60%, line of credit options let borrowers draw on the proceeds from their reverse mortgages at times and amounts they choose. This option is available in addition to other reverse mortgage payment plans including term or tenure payments, as specified at the time of the loan closing.
The new product option takes the line of credit functionality a step further by incorporating an open-end credit feature.
The open-end feature means you can borrow funds from your reverse mortgage via a line of credit and can then repay and access those funds again in the future, whereas under a closed-end credit line, you can only withdraw those funds once.
While adjustable rate reverse mortgages have historically offered this credit line feature, the new fixed rate product is the first ever to do so.
Other reverse mortgage products are still available, offering adjustable rate options with several different payment plan types. The HECM for Purchase is another option for borrowers who are looking to get a reverse mortgage and purchase a new home all within one transaction.
Article Source: https://reverse.mortgage/fixed-rate-line-of-credit
https://www.hud.gov/program_offices/housing/sfh/hecm/hecmhome
