The popularity of reverse mortgages is growing among consumers – and one company is taking that concept to stratospheric levels.
The popularity of reverse mortgages is growing among consumers – and one company is taking that concept to stratospheric levels.
Urban Financial of America, LLC (UFA), one of the top lenders of reverse mortgages in the United States, introduced its HomeSafe proprietary reverse mortgage in September – offering loan proceeds of up to $2.25 million, compared to traditional reverse mortgages or Home Equity Conversion Loans (HECMs), which currently have legislated maximum available loan proceeds of $625,500.
“Now homeowners with significant value in their homes have a reverse mortgage option that may afford them more loan proceeds,” says Steve McClellan, president of UFA, “and potentially a greater amount of cash up front, than a HECM product. Ultimately, HomeSafe can give borrowers an opportunity to tap into more of that property value when they need it.”
As with traditional reverse mortgages or HECMs, HomeSafe can be used by homeowners or homebuyers age 62 and older to leverage home equity for long-term retirement planning. While borrowers can use the proceeds however they choose, HomeSafe may be well suited to extinguishing existing mortgage debt, says McClellan, making improvements or modifications to the home to accommodate changing needs, supplementing medical and in-home care coverage, or buying a home.
However, unlike HECMs, HomeSafe does not carry a required mortgage insurance premium, removing a significant cost. It also is more flexible than a HECM. For purchase transactions, seller concessions and lender credits are allowed.
Condominiums valued at over $500,000 do not have to be FHA-approved for the owners to use this product, unlike HECMs—which can be important for homeowners living in or wanting to buy into higher-priced condo or active adult communities; and the full amount of the loan value is available at closing.
Read this article to know what are the requirements for FHA-approved condos.
“UFA has been a trusted resource for traditional HECM reverse mortgages for more than a decade,” says McClellan. “With HomeSafe, now we can meet the needs of even more consumers through a compelling and competitive proprietary reverse mortgage product.”
