David Prulhiere asked:
There are new reverse mortgage programs available that you should know about designed to save you money. So you have something to compare it to, we will summarize the two standard programs and then talk about the new one.
Program 1: HECM Fixed
Fixed rate is great if you want to know what the interest rate will be for the rest of your life. The interest rate is fixed like the name indicates, so you don’t have to worry about it going through the ceiling some day.
The downfall of this product is that you must take all the funds available at the time of the closing. This is not an issue if you have a mortgage you are paying off or a place to use that money. The only concern is if you get a check for $100,000 or more and you have no home for it.
Program 2: HECM Adjustable
If you don’t want to take all the money available at the time of closing, you will want to take the adjustable program. It allows you a monthly installment or a line of credit (or both).
Program 3: HECM Saver -new-
FHA’s new HECM Saver is a reverse mortgage program designed to reduce the fees on a reverse mortgage to a much more affordable level. It is also there to allow someone a fixed interest rate without requiring a full draw of their proceeds.
The normal upfront mortgage insurance fee is 2% of the value of your home. Not with this program. With the Saver product, you are not charged any upfront mortgage insurance and this can save you thousands of dollars in fees.
The HECM Saver has an adjustable option as well as the fixed. The programs are identical in function as the above mentioned, just with fewer fees. A note to keep in mind is that the Saver products do net you less money, even though the fees are reduced.
Consolidating Debts
There are new reverse mortgage programs available that you should know about designed to save you money. So you have something to compare it to, we will summarize the two standard programs and then talk about the new one.
Program 1: HECM Fixed
Fixed rate is great if you want to know what the interest rate will be for the rest of your life. The interest rate is fixed like the name indicates, so you don’t have to worry about it going through the ceiling some day.
The downfall of this product is that you must take all the funds available at the time of the closing. This is not an issue if you have a mortgage you are paying off or a place to use that money. The only concern is if you get a check for $100,000 or more and you have no home for it.
Program 2: HECM Adjustable
If you don’t want to take all the money available at the time of closing, you will want to take the adjustable program. It allows you a monthly installment or a line of credit (or both).
Program 3: HECM Saver -new-
FHA’s new HECM Saver is a reverse mortgage program designed to reduce the fees on a reverse mortgage to a much more affordable level. It is also there to allow someone a fixed interest rate without requiring a full draw of their proceeds.
The normal upfront mortgage insurance fee is 2% of the value of your home. Not with this program. With the Saver product, you are not charged any upfront mortgage insurance and this can save you thousands of dollars in fees.
The HECM Saver has an adjustable option as well as the fixed. The programs are identical in function as the above mentioned, just with fewer fees. A note to keep in mind is that the Saver products do net you less money, even though the fees are reduced.
Consolidating Debts
Tags: Fixed Interest, Fixed Rate, Interest Rate, Money, Proceeds, Program 1, Rest Of Your Life, Reverse Mortgage, Thousands Of Dollars, Upfront Mortgage Insurance
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