Hands down, the most familiar reverse mortgage is the FHA/HUD "Home Equity Conversion Mortgage". It accounts for the majority of reverse mortgages sold here in West Michigan.
But what if your home has a higher value than the HECM loan limits?
Well, then you're a candidate for a so called "jumbo" or "proprietary" reverse mortgage - a product designed for just such higher valued properties.
Offered by many reverse mortgage lenders, they are designed for a range of situations apart from those that the HECM addresses.
For example, besides higher valued homes, some proprietary products can be used on second (vacation) homes, and on purchase transactions.
Seniors interested in these products might be looking at them as a method of retiring existing debt, assisting in estate taxation issues, or utilizing them for investment strategies.
Here's the difficulty faced in the current market situation: proprietary products face liquidity challenges. They exist based on the offering banks ability to sell them on the secondary market.
The current credit crunch has tightened market liquidity and has curtailed the ability to resell these loans.
And by definition these types of loans are sought by owners of high valued homes. Unfortunately, in some instances, values have declined in today's market place.
This poses a real challenge if you own this type of home and are thinking of a reverse mortgage.
You're best served by working with a specialist with broad knowledge of today's markets.
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First Financial Reverse Mortgages sells ONLY reverse mortgages; we sell no other product. We are West Michigan's reverse mortgage specialist.
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