Reverse Mortgage Loans – Home Equity Conversion Mortgage (HECM) Products

We are going to give you an overview of the HECM Loan Products that are currently available in the marketplace today. These loan products have been created using the strict guidelines and templates set forth by the Department of Housing and Urban Development (HUD). The loans are then federally insured through the Federal Housing Administration (FHA). In order to qualify for a HECM loan you must first meet in person or over the phone with a HUD-approved counselor to discuss how a Home Equity Conversion Mortgage works and the different options that you may have available to you.

The following loan descriptions should give you a basic overview of each of the HECM Loan Products that are currently available to you. However, we strongly advise you to give one of our licensed specialists a call at G.W. Golden Financial if you are seriously considering doing a Reverse Mortgage Loan so that we can go over all of the loan products in much greater detail and make sure that we help guide your decision based on all of the knowledge and information that we can provide you with. We believe that a good decision is always the product of a knowledgeable, confident, informed and comfortable borrower. A HECM Loan can change your life for the better in a matter of thirty days. These loan products may give you the power to have greater financial flexibility, control of your financial freedom, and the ability to live life to the fullest.

HECM ANNUAL ADJUSTABLE CAP 5

This HECM Product gives you the benefits of a lifetime Cap of 5% above the original start rate in your loan as well as the opportunity to have an equity line of credit that you can draw money from whenever you so choose provided that you have not exhausted the funds in the equity line of credit in the past. The interest rate for your loan can never go up or down by more than 2% in any one year period and can only adjust annually on the anniversary of the date that you first entered into the loan. This is a very good HECM Loan product for someone who is afraid of their rate adjusting aggressively in the future but still wants the benefits of the equity line of credit which this loan product provides.

Product Specifics

– Your interest rate can only adjust one time per year.
– Your loan has a lifetime Cap of 5% above the start rate.
– Your interest rate can only go up or down a maximum of 2% in any one year period.
– You can receive an Equity Line of Credit with this Loan Product.

HECM TRADITIONAL MONTHLY ADJUSTABLE CAP 10

This is the Traditional HECM Adjustable Loan Product. This loan product can adjust monthly and there is no limit on a yearly basis to how high or low your interest rate can go. This HECM loan product has a Lifetime Cap of 10% above the original start rate in your loan as well as the opportunity to have an equity line of credit that you can draw money from whenever you so choose provided that you have not exhausted the funds in the equity line of credit in the past. The major benefit to the HECM Traditional Monthly Adjustable Cap 10 is that the start rate for this loan product can potentially be the lowest start rate of any of the HECM Loan Products that are being offered in the market place today.

Product Specifics

– Your interest rate can adjust each month.
– Your loan has a lifetime Cap of 10% above the start rate.
– This Loan Product has no annual interest rate cap so the lifetime Cap of 10% would take precedence in this loan.
– You can receive an Equity Line of Credit with this Loan Product.

HECM FIXED RATE FOR A LIFETIME

This HECM Loan Product allows you to obtain a fixed interest rate for the life of the loan. You will be given the option of buying the interest rate down to a lower fixed rate when you initially close your HECM Loan. Whatever rate you start with in this loan product will be fixed for the life of the loan. With a HECM Fixed Rate product, you receive a one time lump sum when your loan funds rather than receiving an equity line of credit. This HECM Loan product may be beneficial for someone who does not want a large amount of cash out at closing but would rather have the security of knowing exactly what their interest rate will be each and every month for the rest of their lives.

Product Specifics

– Your interest rate is fixed for the life of the loan.
– You have the ability to buy down the interest rate at closing.
– You cannot receive an Equity Line of Credit with this loan product.

HECM HOME PURCHASE LOAN

If you are 62 Years of Age or older and would like to buy a home using a HECM Loan Product you may have the ability to do so. The home you buy must be your primary residence and you will need to put a much larger down payment down on the new house than you would with traditional financing. However, all of the HECM loan products discussed above would be available to you and you would then have the option to live the rest of your life without ever having to pay another mortgage payment again. Of course, you would still have to pay your property taxes and homeowners insurance moving forward in your new home just like you would with any type of conventional financing.

Product Specifics

– Any of the HECM Loan Products listed above would qualify for a HECM home purchase loan.
– You will need to make a larger down payment on the new house than you would with traditional financing.
– You would then have the option of never making another mortgage payment for the rest of your life.
– It will still be mandatory that you make your property tax and homeowner’s insurance payments on your new home moving forward just like any other conventional loan product that is in the marketplace today.

G.W. Golden Financial is NOT A GOVERNMENT AGENCY and is not affiliated with HUD or the FHA. None of the materials included on this website or any marketing were provided or approved by the Department of Housing and Urban Development (HUD) or the Federal Housing Administration (FHA).