Recently a few people have asked me, “is Financial Freedom my only option for a jumbo reverse mortgage?”. At the moment… Yes.
However, in the next few weeks we will see a few new programs roll out. The one that I am most interested to see is the BNY Mortgage Company Prime Advantage (TM) program. This will be the very first reverse mortgage program that will have a fixed rate option. Will the fixed rate be for the life of the loan? I’m not sure yet, but I was lucky enough to get some information on the product before its national release. Seattle Mortgage has also released their own proprietary product called Independence Plan (TM) in a few states but should be released nationwide in the next couple of months.
Below is a quick overview of what each program offers:
- Variable Rate Only – Semi-annual reset
- For homes with appraised values of $450,000-$700,000
- All Cash Account programs have the Equity Choice Option which allows the borrower to protect a minimum of 10% up to a maximum of 50% of their home equity
You have three choices.
1.) Credit Line Option – Open ended credit line and the unused line of credit grows by 5% each year.
2.) Combo Plan – No origination fee, borrower is responsible for all third party closing costs. Requires borrower to draw at least 75% of the initial maximum available advance at the time of closing, which must be at least $200,000.
3.) Cash Out Option – No origination fee and no closing costs (excluding state or local taxes, if any) if you draw a minimum of $275,000 at closing. The required draw must be 100% of the maximum available benefit at the time of closing.
- Fixed and Variable Rate – semi annual reset for variable rate products
- Will have an equity protector feature, which will allow consumers to set aside a percentage of equity in their home
At the moment you will have two options:
1.) No Closing Costs Option
2.) Line of Credit Plan
- Variable Rate Only – semi annual
- Borrowers would not have to pay any fees associated with the loan
- No required initial draw amount
Have a great weekend!