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Reverse mortgages differ from other loans in the following ways:

• You don't need an income or high credit score to qualify for a reverse mortgage
• You can use your reverse mortgage to provide additional monthly income
• You are protected and insured against ever owing more than the value of your home
• You never give up title to your house

Why Choose The Mortgage Planners?

The Mortgage Planners offer thirty-four years of financing experience in San Diego, California with a host of satisfied borrowers. We understand that choosing a reverse mortgage to fulfill your financial needs is a big and sometimes complicated decision. That is why we are dedicated to walking the client through the entire process. We offer a free consultation to discuss if a reverse mortgage is right for you and offer free educational workshops. We want our clients to be completely comfortable with the decision that they make and be able to enjoy the golden years of their life.

Reverse Mortgage Programs:

HECM – Home Equity Conversion Mortgage HECM refers to a reverse mortgage insured by HUD and the FHA. All of the reverse mortgages issued in 2009 and 99% of all volume in 2008 were HECMs. The FHA’s HECM program contains special requirements like HUD counseling and a property value ceiling. The HECM property value ceiling is currently at $625K. This means that if the home is appraised for more, the loan amount will be based on the $625K value.

There are currently three different types of HECM reverse mortgage and each offers either a fixed rate option or an adjustable option. The three programs along with the differences between the fixed and adjustable options are explained in more detail below.

Fixed Rate Reverse Mortgage The fixed rate HECM eliminates the risk of adjustable-rate mortgages. With the HECM Fixed Rate loan, the borrower has the comfort of knowing exactly what their interest rate will be for the life of the loan and the certainty that the rate will never increase. In addition, since the interest accrual is known, borrowers will have the comfort of knowing exactly how much they may pass on to their estate. Borrowers must take a full draw at closing.

Adjustable Rate Reverse Mortgage Adjustable rate reverse mortgages have by far been the most popular reverse mortgage loan to date. They are based off of two indices; Treasury Index (CMT) and LIBOR Index. The adjustable option allows the funds available to be paid out as a lump sum, line of credit, tenure payment, or any combination.

HECM Saver: Lower up-front costs With the newly introduced HECM Saver, the up-front mortgage insurance premium required by the Federal Housing Administration (FHA) is significantly reduced as compared to a HECM Standard. As a result, you could save thousands of dollars, depending on your home?s value. While the maximum amount of money you can borrow is less than with a HECM Standard, lower costs may make it an attractive option.

HECM Standard: Maximum borrowing capacity The HECM Standard, on the other hand, may be more desirable for those who need the most money available to them. This reverse mortgage allows you to borrow a maximum amount that is greater than with a HECM Saver. The up-front costs you will pay, however, are higher with a HECM Standard.

Compare HECM Saver to HECM Standard FHA designed the HECM Saver as an alternative to the HECM Standard for the purpose of lowering loan closing costs and providing an alternative to a Home Equity Line of Credit (HELOC). The program is designed for those who would like to borrow a smaller amount than what is currently available with the HECM Standard. The HECM Saver features a lower initial Mortgage Insurance Premium (MIP) of .01% of the loan amount, where the HECM Standard requires a 2.0% MIP.

The amount of equity you can access with the HECM Saver is less than with the HECM Standard. For example, if a 74 year old homeowner using the HECM Standard initially accesses 68.9% of their home equity, then the same homeowner using the HECM Saver can only draws out 52.9%. Since the initial loan balance is significantly smaller, using the HECM Saver can leave you with more equity in your home. Alternately, the HECM Standard can allow you to access more equity.

Purchase Reverse Mortgage Beginning January 1, 2009, FHA began insuring reverse mortgage loans for Seniors to purchase homes. This program will allow Seniors to leverage their cash and a reverse mortgage does not have required monthly mortgage payments like traditional mortgages. Reverse mortgages are based on appraised value and Borrowers age. The older you are, the more you qualify for.

Reverse Mortgage Refinance A reverse mortgage can also be refinanced in the future as the property increases in value and the borrower gets older, potentially making more funds available.