Categories of Reverse Mortgages You Should Know

To a senior homeowner, a reverse mortgage can be a much needed lifeline by providing an additional source of financial support for their retirement. Not only can it eliminate their monthly mortgage payment, it can also provide the necessary cash to put the Gold back in the Golden Years. Unfortunately not a lot of people know about this unique FHA Insured type of mortgage, and the few that do know about it may have heard untrue and unsubstantiated criticism. It is important to do your own research in order to find out the truth about Reverse Mortgages and determine whether or not it is right for you and your family. As a side note, as long as one of the spouses is 62 or over, a younger spouse can still be eligible due to recent changes. Following are some different types of reverse mortgages available in Hawaii:

Single Purpose Reverse Mortgage

Although his particular type of reverse mortgage loan is not available in Hawaii, it is worth mentioning.  It is usually available through certain nonprofit organizations. The main difference being that the closing costs are somewhat lower.  However, the lender can dictate how you use the proceeds from your loan.  With a traditional Reverse Mortgage, there are no restrictions.

Proprietary

Proprietary Reverse Mortgages are often referred to as Jumbo Reverse Mortgages and are offered through private companies.  They are not, however, insured by FHA, so they can be more risky.  The advantage is that the lender sets the loan amount.  Where the FHA Insured HECM (Home Equity Conversion Mortgage) is limited to a percentage of the home’s appraised value, it is capped to a percentage of $636,150.  In other words, even if your appraised value comes in at $2,000,000, you would receive the same amount of cash as a home valued at $636,150. On the down side, the interest rates are usually substantially higher than an FHA Insured HECM. 

HECM – Home Equity Conversion Mortgage

This is by far the most popular and safest type of reverse mortgages. HECM’s are heavily regulated and insured by the federal government. Although the HECM only offers a percentage of your equity up to the Maximum Claim Amount of $636,150, the interest rates are very competitive, there are no restrictions on how you use your proceeds, and the loan is FHA Insured, thus protecting you and your investment. Before getting an approval you must go through a counseling session which is designed to inform you of the benefits and disadvantages of this loan.

You’ve Invested a Lifetime, Now Reap the Rewards:

A reverse mortgage is not for everyone. It is always recommended to consult with your family, a financial advisor, and/or a reverse mortgage specialist before proceeding.

To find out how much you qualify for, and whether a reverse mortgage is right for you, consult the author of this article to discuss the pros and cons. For more information you can also visit: www.AlohaMortgageSolutions.com. There you will find two short video’s, one title “Reverse Mortgages Explained;” and the other, “Testimonials of Real Hawaii Clients.”

For your FREE, no-obligation quote, contact Daniel Nicolosi, at Harbor Financial Group – Your Aloha Mortgage Solution, in Honolulu. You can reach him directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 from the Neighbor Islands. Within 10 minutes he can usually tell you whether you are eligible, and how much you may be eligible for.

Call or email to find out how much you may be eligible for:
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