The HECM Saver Reverse Mortgage pros and cons. If you are currently in the process of looking for a reverse mortgage then you may want to look at the HECM Saver product more closely. There are upsides and downsides to this mortgage product offered by the FHA.
Essentially, the HECM Saver loan is a low closing cost reverse mortgage product. This loan product is for borrowers who are looking for a reverse mortgage, but do not want to pay the higher closing cost associated with it.
The HECM Saver product lowers the upfront mortgage insurance premiums from the typical 2% of the value of the home to just .01%. For example, if the value of your home is $200,000 and you were to use the HECM Standard product, then you would end up paying 2% or $4,000 as an upfront mortgage insurance fee to the FHA. But with a HECM Saver, you would only pay .01% or just $20.
Of course there is always a catch because why would anyone want to pay higher closing costs. The HECM Standard product allows for more cash out versus the HECM Saver. For example, if your home value is $200,000 and you are 70 years old, and you were to use the HECM Standard product you could take out a max lump sum of $132,600. With the HECM Saver using the same scenario the max lump sum cash you could take out would only be $103,400.
So the question is, how much do you need and how long do you need it for? These are 2 very important questions in considering a reverse mortgage loan. You may not need the max cash-out or you may not be staying in your home for the long term, so the HECM Saver would be a perfect fit.
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http://www.reversemortgageloanfinancing.com/2013/06/25/hecm-saver-reverse-mortgage-pros-and-cons/
HECM Saver Reverse Mortgage Pros and Cons
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Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5