Today, the two most popular types of reverse mortgages on the market are the Home Equity Conversion Mortgages (Insured by the FHA), and proprietary reverse mortgages. The former you are most likely familiar with, having seen a number of television ads with celebrities touting the benefits of the reverse mortgage. However, reverse mortgages have returned in a big way.
The good news is that homeowners of higher-valued properties looking to incorporate their home equity in retirement-one that allows them to tap into considerably more of their home's value.
Proprietary reverse mortgages are designed for homeowners of higher-valued properties that exceed the federal lending limit, helping them access a larger portion of their home's value. Typically those over the age of 55 or 60 with significant equity in a higher-value home could be ideal candidates for a proprietary reverse mortgage.
Contact me today to learn more or for an assessment of your unique situation.
Unique features of a proprietary reverse mortgage:
While proprietary reverse mortgages have many similarities to the traditional reverse they are unique for a number of reasons. One of the most notable is that many proprietary reverse loans offer loan amounts as high as $4 million. In addition, property values are considered up to $10 million with some lenders. Another is that these private mortgages do not charge the significant FHA mortgage insurance premiums that are required on the traditional Home Equity Conversion Mortgage- one of the traditional reverse mortgage most significant closing costs and ongoing charges.
A proprietary reverse mortgage is a private or proprietary loan which means the loans terms, conditions, and guarantees are established by the lender versus the typical federally-insured reverse mortgage which is administered by HUD and insured by the Federal Housing Administration.They are sold to pools of private investors.
Here are some of today's proprietary reverse mortgages (features and benefits vary by the issuing bank and loan product chosen).
- Loan amounts to $4,000,000
- Property Values to $10,000,000
- No first-year distribution limitations
- Flexible disbursement options
