Jumbo Reverse Mortgage, what are your options?

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:  

Financial Freedom Cash Account (TM)

  • 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.

BNY Motgage Company (TM) 

This program hasn’t been released yet but I’ve been told it should be available by the end of February. 

  • 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

Seattle Mortgage Independence Plan (TM) 

This program has been released in a few western states and should be released nationwide by the end of 2007. 

Basic Overview

  • 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!

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