Reverse Mortgage Programs
HECM ARM | HECM Fixed | HECM Saver |HECM for Purchase
By working with American Pacific Mortgage -a nationally recognized Mortgage Banker licensed in 18 states with 150 branches, Ken is able to offer a wide variety of reverse mortgage programs.
Since each borrower is unique, direct contact with the borrower is absolutely essential in order to best explain the programs available, advise the borrower of the best option to fit their needs and then direct them to an independent counselor. Counseling is required for all reverse mortgage loans and a counseling certificate of completion must be submitted prior to signing the final loan application. This is a protection for the borrowers, ensuring they are fully informed and making the right decision based on their personal circumstances.
Discover the peace of mind that comes from financial independence. Ken is available to answer all of your questions and provide detailed facts and figures for your review and consideration.
The Home Equity Conversion Mortgage (HECM Standard)
The Home Equity Conversion Mortgage (HECM) is the oldest and most popular reverse mortgage product, accounting for over 90 percent of the total market. Available since 1989 to homeowners 62 or older, HECMs are insured by the federal government through the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development.
The amount of money you get from a HECM depends on several factors, including: your age, appraised home value, and current interest rates. In general, the older you are and the more valuable your home (and the less you owe on your home), the more money you get. The location of your home also affects the loan size. The size of a HECM depends on the maximum loan limit, which varies by county and is adjusted annually. Keep subscribed to Ken's reverse mortgage news feed for updates!
Borrowers must pay a mortgage insurance premium (MIP), equal to 2 percent of the maximum loan limit, plus an annual premium thereafter equal to 1.25 percent of the loan amount. The insurance premium guarantees that you have continued access to your loan funds. Also, the MIP guarantees that you will never owe more than the value of your home when the HECM must be repaid.
HECM Fixed (Standard or Saver)
The HECM fixed rate reverse mortgage is surprisingly low, call for the current rate. The HECM is not a Jumbo plan and the home value is limited to the HUD maximum claim amount. Fixed rate programs require cash draws at closing with no line of credit or monthly income option.
HECM for Purchase (Standard or Saver)
Qualifying senior homeowners can use the FHA home equity conversion mortgage ( HECM) to buy a new home.This works by using available reverse mortgage funds along with a downpayment to purchase the home. Please see the HECM for Purchase page for further details and updates on this exciting new program! There is a page for HECM for Purchase FAQs and HECM for Purchase Guidelines for further convenience.
HECM Saver
The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) is pleased to announce a second option for the Home Equity Conversion Mortgage (HECM) Program. FHA designed HECM Saver as a second initial mortgage insurance premium (MIP) option for the purpose of lowering upfront loan closing costs, for mortgagors who want to borrow a smaller amount than what would be available with a HECM standard (1)
Initial and Monthly Premiums
For HECM Saver, the initial MIP will be 0.01 percent (0.01% or 0.0001) of the maximum claim amount (2) (MCA), and is collected at time of loan closing.
For HECM Standard, the amount of initial MIP will continue to be 2 percent (2% or 0.02) of the maximum claim amount, which also is collected at the time of loan closing.
(1)The collection and remittance of initial MIP that is determined by 2% of the maximum claun amount must be identified as
a separate and distinct premium option from HJZCM Saver; and therefore will be known as HECM Standard.
(2)Maximum claim amount is the least of the appraised value, national mortgage limit, or sales price.
MIP Comparison
| HECM Saver | HECM Standard | |
| Initial MIP | 0.01% | 2% |
| Annual MIP (monthly on outstanding loan balance) | 1.25 % | 1.25% |
Availability of HECM Saver and HECM Standard
- All HECM transaction types (traditional, purchase, refinance)
- All five payment plans (tenure, term, line of credit, modified tenure, modified term)
- All interest rate indices (Constant Maturity Rate and London Interbank Offered Rate)
- Adjustable rate mortgages (monthly and annual)
- Fixed rate mortgages
Note: On October 4, 2010, the amount of HECM proceeds made available to all mortgagors was reduced. New principle limit factor tables for HECM Saver and HECM Standard are available to mortgagees, counselors and others involved in the origination of HECMs on HUD's website.
