Loan Options

Mortgage Advocates offers a few different reverse mortgage options. The details and benefits are outlined below. When you speak with your Mortgage Advocates Reverse Mortgage Specialist, they will be able to answer all of your questions and help you to determine which loan best suits your needs.

Home Equity Conversion Mortgage Highly regulated as part of the U.S. Department of Housing and Urban Development, the Home Equity Conversion Mortgage (HECM) provides both financial security and state of mind. The most popular type of reverse mortgage, the HECM is available to those with single family homes, 1-4 unit homes as long as the borrower occupies one of the units, manufactured homes built after 1976, condominiums, PUD's, and townhomes.

Borrowers have the option of receiving proceeds from the reverse mortgage in several ways including as:

• A lump sum,
  
• A line of credit,
  
• Fixed monthly payments
  
• Any combination of the above
  

• The borrower’s age
  
• The value of the home
  
• Current interest rates
  

The loan limit also varies depending on the area in which you reside. Rural areas have lower loan limits than do metropolitan areas. With an HECM, the interest rate fluctuates, being adjusted either monthly or annually depending on the plan the homeowner chooses. Regardless of changes in the interest rate, monthly payments (should you choose this option) will never vary.

Costs associated with an HECM are very similar to those incurred with a traditional home mortgage. They include an origination, appraisal, credit, flood, pest, title, and escrow fee and an FHA insurance premium. However, the only out of pocket cost will be the appraisal fee, whereas the other costs may be financed as part of the reverse mortgage. We do not make you prepay the appraisal fee as may be the case on a traditional home mortgage.

Home Keeper- Fannie Mae, a government backed subsidy, maintains the Fannie Mae HomeKeeper program. This program was created to supplement the unmet needs of seniors. The HomeKeeper program is available to every senior 62 and over throughout the United States who lives in an owner occupied single-family home, condominium, qualified planned unit development, property held in trust, or qualified leasehold.

The amount of funds available to the borrower depends on

• The age and number of borrowers
  
• The adjusted value of the home
  
• Current interest rates.
  

These proceeds may be paid out as a fixed monthly payment, line of credit, or as a combination of these.

On a Home Keeper mortgage, the interest rate fluctuates monthly based on the index rate published by the Federal Reserve. This rate will never rise more than 12 percentage points above the initial rate.

Fees are similar to those of other mortgage methods. The origination fee may not exceed 2 percent of the adjusted value of the home. There is also a monthly servicing fee (about $30-$35), and various closing costs. For the most part, these can be financed as part of the mortgage.

Once you have a chance to review the different program options please continue to our "getting started" section.

Financial Freedom™ Cash Account-Advantage™
(Contact us for availability in your state)
The Cash Account-Advantage™ Plan offers several options to provide seniors with a broad range of choices to access significant home equity opportunities. The Cash Account™ is similar to home equity loans offered by banks. The benefit is a function of the home value and age with no income qualification. No repayment is required until the borrower permanently moves out f the home.
Features and Benefits:

• Designed for borrowers age 62 years or older
  
• Virtually no maximum home value or loan limit
  
• Special six-month introductory rate
  (6 month LIBOR [index] + 3.5% [margin])
  
• Lifetime interest rate cap is 6% over the initial annual percentage rate
  (6 month LIBOR [index] + 5% [margin])
  
• No equity or appreciation sharing and no maturity fee
  
• Proceeds/advances are not taxable
  
• No prepayment penalty
  
• Loan is non-recourse
  
• Servicing fee is automatically financed on the account monthly 
  
• Eligible home types: single family detached, manufactured, condo,
  PUD, 1-4 rental unit if one is owner occupied
  
• Counseling by an independent counselor