Reverse Mortgage Wholesale Loans

A reverse mortgage wholesale product is not directly available to you as an applicant for a reverse mortgage. It is sold to a lender at a discounted (wholesale) interest rate, and the lender then offers it to you after adding points to the rate.

Sources Of Reverse Mortgage Wholesale Loans

There are only three organizations who sell reverse mortgage wholesale products; Fannie Mae; the Federal Housing Authority (FHA); and the Financial Freedom Cash Account. The loans from each of these entities vary in their available payment alternatives.

The FHA reverse mortgage wholesale product is called the Home Equity Conversion Mortgage, or HECM. The maximum you may borrow against your home in this program is about $360,000, but your limit will depend on your home’s location. The HECM is the reverse mortgage wholesale product underlying over 90% of all US reverse mortgages.

Both the FHA and HUD--the Department of Housing and Urban Development--guarantee FHA reverse mortgage wholesale loans. The guarantee means that the borrower is assured of getting the amount promised, and that the lender is assured of getting the entire principal and accrued interest when the loan is terminated, even if the home is sold for less than that amount.

Fannie Mae guarantees its Homekeeper reverse mortgage wholesale loans, which will allow you to take up to $417,00, and is somewhat unusual in that Fannie Mae allows you to use the proceeds from your existing home to purchase a less expensive one. Although Fannie Mae is not run by the Federal Government, the amount of business they do, and the strict regulations to which they must adhere make their guarantee of their reverse mortgage wholesale loans as solid as those of the FHA and HUD.

Both FHA and Homekeeper reverse mortgage wholesale loans are available in all fifty states.

Financial Freedom Cash Account reverse mortgage wholesale products from a subsidiary of Shearson Lehman are designed for homeowners wanting to borrow against high-value homes, usually with a minimum appraised value of $500,000. There is no limit to the amount which can be borrowed with a Financial Freedom Cash Account loan, and the loans are privately guaranteed. They are, however, only available in twenty-four states.

Where To Find A Reverse Mortgage Lender

Because you, as an applicant for a reverse mortgage, are not eligible to get a reverse mortgage wholesale loan, you should comparison shop among reverse mortgage lenders to find the ones who offer the lowest markups on their products. You can find a list of reliable lenders in your state by doing a search at the National Reverse Mortgage Lenders Association--NMRLA--website.

Once you start looking for a reverse mortgage wholesale through LLS Financial or any other company, you will quickly start to see a trend. You want to check on how quickly each of these reverse mortgage companies will be able to approve you. Typically a loan takes a couple of weeks to process – but when it comes to a reverse mortgage wholesale you should be able to have your reverse mortgage in hand within twenty four hours

How Does a Reverse Mortgage Work

The passing of the American Homeowner Ownership and Economic Opportunities Act of 2000 Section 201 has now provided senior citizens further financial aid through the form of a reverse mortgage. Of all the different age groups that are eligible to take out some form of financial aid, it is the senior citizen age group that requires the most financial assistance yet have the least amount of options. This is because majority of those within this age group have already retired and only rely on their savings and pension as a source of funds to help them live out their remaining years. Through the introduction of the reverse mortgage, senior citizens have now been given the opportunity to get the financial aid that they need for medical care, home improvement, and the like.

This has been made possible because of the fact that unlike traditional forms of mortgages and loans available in the market, reverse mortgages are exempted from any tax obligations and the responsibility of the payment falls on the financial institution or creditor. Senior citizens who have been granted a reverse mortgage are not required to make any form of repayments to the financial institution or creditor for as long as one or both senior citizens remain to live in the home whose equity has been used.

If you are considering taking out a reverse mortgage, there are a few requirements you would need to present when you go to a creditor or financial institution. Here are the requirements that you would need.

Age Requirement

According to Section 201 of the American Homeowner Ownership and Economic Opportunities Act of 2000, the reverse mortgage is available only for individuals who are at least 62 years and above. You may be able to apply for a reverse mortgage if you are below 62 years of age provided that your spouse has met the minimum age requirement. This is because the conditions stated in the American Homeowner Ownership and Economic Opportunities Act of 2000, once it is proven that at least one spouse is at least 62 years of age and above, both will become eligible to take out a reverse mortgage.

Home Equity

The equity value of your home is its fair market value minus any existing loans that you may have taken out. In order to get the home equity value of your property, you would need to attain the services of an appraiser. For your home equity to also be eligible, you must be in ownership of a permanent type of property such as single house, an apartment or condominium. If you live in a mobile home or a trailer, you would not be able to qualify for a reverse mortgage.

Length of Stay in Home

For you to be eligible for a reverse mortgage, you need to have stayed in your current residence for at least one month. This is the period of time that financial institutions and creditors would consider you to have a permanent residence on the home whose equity would be use towards the reverse mortgage that you are planning to take out.

Home Equity to be Applied Must be Primary Place of Residence

If you have been fortunate enough to be able to purchase a vacation home, you would not be able to use this towards the reverse mortgage that you are planning to take out, even if you meet the one month stay period requirement and the home equity is a lot higher than your primary residence. This is because the reverse mortgage can only utilize the home equity of the house that you have stayed most of your life with, which is your primary place of residence.