A reverse mortgage wholesale product is not directly available to you as an applicant for a reverse mortgage. It is sold to a lender at a discounted (wholesale) interest rate, and the lender then offers it to you after adding points to the rate.
Sources Of Reverse Mortgage Wholesale Loans
There are only three organizations who sell reverse mortgage wholesale products; Fannie Mae; the Federal Housing Authority (FHA); and the Financial Freedom Cash Account. The loans from each of these entities vary in their available payment alternatives.
The FHA reverse mortgage wholesale product is called the Home Equity Conversion Mortgage, or HECM. The maximum you may borrow against your home in this program is about $360,000, but your limit will depend on your home’s location. The HECM is the reverse mortgage wholesale product underlying over 90% of all US reverse mortgages.
Both the FHA and HUD--the Department of Housing and Urban Development--guarantee FHA reverse mortgage wholesale loans. The guarantee means that the borrower is assured of getting the amount promised, and that the lender is assured of getting the entire principal and accrued interest when the loan is terminated, even if the home is sold for less than that amount.
Fannie Mae guarantees its Homekeeper reverse mortgage wholesale loans, which will allow you to take up to $417,00, and is somewhat unusual in that Fannie Mae allows you to use the proceeds from your existing home to purchase a less expensive one. Although Fannie Mae is not run by the Federal Government, the amount of business they do, and the strict regulations to which they must adhere make their guarantee of their reverse mortgage wholesale loans as solid as those of the FHA and HUD.
Both FHA and Homekeeper reverse mortgage wholesale loans are available in all fifty states.
Financial Freedom Cash Account reverse mortgage wholesale products from a subsidiary of Shearson Lehman are designed for homeowners wanting to borrow against high-value homes, usually with a minimum appraised value of $500,000. There is no limit to the amount which can be borrowed with a Financial Freedom Cash Account loan, and the loans are privately guaranteed. They are, however, only available in twenty-four states.
Where To Find A Reverse Mortgage Lender
Because you, as an applicant for a reverse mortgage, are not eligible to get a reverse mortgage wholesale loan, you should comparison shop among reverse mortgage lenders to find the ones who offer the lowest markups on their products. You can find a list of reliable lenders in your state by doing a search at the National Reverse Mortgage Lenders Association--NMRLA--website.
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