The New York Times reported on the new HECM Saver earlier this week.
The Federal Housing Administration’s new reverse mortgage product trims the upfront insurance premium due at closing to 0.01 percent of a property’s value, from 2 percent. But the amount that can be borrowed is also reduced, by 10 to 18 percent, compared with the standard HECM loan program.
“I think we’re going to see a lot of people using it,” said Stanley Gil, a reverse mortgage consultant in Garden City, N.Y. The loan “is really going to help people who need some extra cash and have built up equity in their home,” he said.
AARP says the Saver loan would work well for those homeowners who did not need to borrow the maximum allowed — which is $625,500, based on a property’s value and the interest rate of the reverse mortgage, among other things. HUD provides calculators to help determine how much can be borrowed, and AARP offers advice on its Web site.
The article also briefly discusses HECM for Co-Ops, which Lemar Wooley, spokesperson for HUD said is still un-available. The agency is “currently evaluating the HECM program for co-ops to determine if it would meet our financial requirements,” he said.
Read the rest at the link below.
