How long will HECM changes last?
by Sam Collins

Recently there have been significant changes by lenders to the FHA insured  HECM (Home Equity Conversion Mortgage)  fixed rate, reverse mortgage program.  In essence these changes mean:

More Cash for Senior Homeowners! 

Here are the most noteworthy changes to the HECM Fixed program:

1.  The service fee set asides is now zero.  Yes, in most cases eliminated. 

2.  The monthly service fee is now zero.  Most lenders have eliminated this fee.

What does this mean for you and other 62 or older homeowners?

Previously, lendrers calculation included a monthly service fee for the life of your reverse mortgage loan.  These charges amounted up to $35.00 per month servicing fee.  Now this monthly serving fee charge has been  reduced to zero by most lenders. The previous calculations included thousands of dollars in the calculation that was set aside to pay this monthly fee, which resulted in less net money or funds available for you when you complete a reverse mortgage.
  

For many senior homeowners eliminating the service fee set aside can increase the amount of cash you receive significantly.  This is a huge savings for you and means now you can receive $2,000 to $ 5,000+ more money at closing because of the FHA monthly service fee set aside now being reduced to zero.

More changes:

Many lenders have reduced their reverse mortgage origination fees on the fixed rate reverse loan significantly.   This can mean as much as $2500 or more at closing in reduced origination fee.  Net result of these changes mean more cash for you.

These changes combined can effectively provide $5,000 - up to $ 10,000 extra cash back in your pocket at the time of closing. These changes are a huge additional benefit for senior homeowners who are 62 or older.  Also, these changes can mean some homeowners who did not qualify previously, may qualify now.

If you thought that the FHA reverse mortgage closing costs were too expensive, these changes can be a  major savings opportunity for you.

How long will these changes last?

We are not sure how long this offer will remain and suggest that you still weigh your financial options.  But considering that nothing lasts forever, these changes do present clear and present reasons for consideration. Please note these changes may vary by lender.
  

If you are serious about a reverse mortgage loan, this may be the time for you to get a new estimate of what these great savings will mean for you!

If you have any questions about these changes, do not hesitate to contact us with your questions or concerns.