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The fixed rate mortgage has been a very popular option
since it came on the market in 2008. The negative was the
requirement that all of the funds available needed to be
withdrawn at closing leaving no room for a line of credit or other
options.
HUD recently made changes to all Reverse Mortgages
limiting the amount of money a borrower could take at closing to
60%.With the additional 40% available after one year. This was
particularly adverse to the fixed loan since you would never be
able to draw on the other 40% offered.
Now there is a hybrid option that allows you to take the
60% upfront but then gives you numerous options for future draws.
Those options come in multiple preferences.
The Flexible Fixed Option
- It
functions exactly like the adjustable option with the comfort of
a fixed rate.
- All
pay out options are available; monthly check (tenure or term),
line of credit, lump sum.
Some options to
consider
- An
initial draw of 60% of the available principal limit with the
additional 40% drawn automatically on day 366 of the loan.
- An
initial draw of the 60% available but then spread out the
remaining 40% over the next four years.
- An
initial draw of your choosing with the remainder in a line of
credit.
- An
initial draw of your choosing and one of the monthly payment
options either tenure or term.
Keep in mind
that the line of credit growth rate, so popular in financial
planning, still applies balance remaining in the line of
credit
Traditional
Options
The traditional
loans are also still being offered, the adjustable with all
disbursement options as well as the traditional fixed which
allows for all available funds to be taken at closing.
DON'T Forget the
Reverse For Purchase which does allow for an exception to the 60%
draw rule allowing for complete withdrawal of funds available to
assist in a purchase.
Call today to
see if one of these options is suitable for you!
1-800-497-5235
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