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Flexible mortgages help debt problems

Britons are feeling particularly positive about flexible mortgages at present, as they see them as a good way to ward off debt problems. This is ...

FAR Releases Jumbo HELOC Reverse Mortgage 'HomeSafe Select'

FAR and AAG began partnering in March to expand the reach of new private products. AAG markets the jumbos as ‘Advantage’ in its retail channel and HomeSafe in its wholesale channel.

FAR president Kristen Sieffert told RMD in an email that she believes the HomeSafe Select is the final bridge between HECMs and proprietary products.

“In designing HomeSafe Select, we wanted to speak to a borrower who was ready to access some funds but who doesn’t necessarily need all the proceeds available with our HomeSafe products,” she said. “With HomeSafe Select, people can start planning for retirement today and also benefit from a growing line of credit that can be accessed when they need it.”

This is currently the only adjustable rate proprietary reverse mortgage on the market, with the open-end adjustable rate based on the Wall Street Journal 3-month LIBOR index.

To illustrate the use of the loan, FAR provided the example of a 72-year-old in California with a home worth $800,000 and a $80,000 balance on the forward mortgage. This prospective borrower may be able to receive $270,400 in loan proceeds after paying off the first mortgage. This is in contrast to being able to receive approximately $220,000 with the HECM. The borrower’s value in the line of credit could be $305,234 at the end of year three and $432,843 at the end of year 10.

FAR Rolls Out 'Flex' Option for HomeSafe Jumbo Reverse Mortgage

On the secondary market. 

FAR then teamed up with industry leader American Advisors Group to offer the HomeSafe on a correspondent basis in March, with AAG branding the products as “AAG Advantage” through its retail channel.

The HomeSafe Flex mortgage will initially be available through the retail, wholesale, and correspondent channels to consumers in California, Florida, and Texas. Additional states will join the lineup over the next several weeks, according to a FAR spokesperson. 

“Our mission at FAR is to continuously innovate so that our partners and reverse mortgage specialists have access to a broad product suite to meet the varying needs of the clients we serve over the course of their retirement years,” Sieffert said. “The introduction of the Flex option is one step further toward that goal, and we anticipate introducing additional products into the market later this year.”

FAR’s jumbo expansion represents just one example of proprietary reverse mortgage growth in 2018: Reverse Mortgage Funding introduced its private Equity Edge loan, designed for borrowers with homes valued at $700,000 or more, last month, and Longbridge Financial indicated that it plans to offer multiple new proprietary products this year.

Who should get a flex pay mortgage loan?

So my husband and I have found a home that we really love but its out of our price range at the current moment. I have a job in September on hold when I graduate from college and we will be able to afford the house then, but it will probably be gone.

Those loans are generally gone. They are certainly gone if you also don't have a down payment.

The reason they are gone is that they were too high risk for the average person to correctly handle.