After rolling out the first new jumbo reverse mortgage product in two years, Generation Mortgage announced it closed the first Plus product on Wednesday.
“The Generation Plus loan caters to an underserved segment of senior homeowners living in higher-valued homes,” said Scott Peters, President and CEO, Generation Mortgage Company. “We’re very pleased with the quick market acceptance of our jumbo product as it demonstrates that Generation Mortgage is filling a genuine market need among seniors seeking to obtain the highest payout possible on one of their most valuable assets.”
Available for seniors with homes appraised between $500,000 and $6 million, the product can offer certain borrowers with more proceeds than the Federal Housing Administration’s reverse mortgage product.
“Getting this reverse mortgage gives new meaning to the phrase, ‘house proud,'” said Barbara, a Newport Beach resident who closed on the loan. “Until now, we were unable to leverage our home equity. This was a huge frustration as we did not want to move and we had all this money tied up in home equity. The Generation Plus loan has been the perfect solution allowing us to access this money, stay in our home, and gave us peace of mind.”
According to the couple, tapping into their home equity allows them to invest for their personal goals of providing financial security to their heirs.
“Most homeowners I’ve spoken with are strategically re-evaluating their estate and are considering using a jumbo reverse mortgage to re-distribute their assets in a manner that promotes their legacy,” said Raymond Denton, a reverse mortgage originator with iReverse Home Loans and Generation partner. “The Generation Plus loan may allow consumers to reduce inheritance taxes and provides maximum financial benefit to heirs.”
Different than jumbo reverse mortgages offered in the past, the Plus requires a minimum FICO score of 700, a first for the industry. The product also provides borrowers and their estate an extra benefit through its Gen Plus Estate Guard.
”The benefit is that despite the non-recourse nature of the loan, borrowers and heirs are potentially exposed to significant tax liability if the future home value is not sufficient to cover the accrued loan balance,” said the company in materials provided to correspondents. ”By having the ability to monitor the home value versus the loan balance, they can potentially help keep the loan from becoming grossly upside down.”
RMD previously covered more of the unique aspects of the loan here.