Mortgage News February 15, 2023
It is now possible to obtain a junior-lien mortgage product that does not require monthly payments. There is only one catch: to qualify, you must be 55 years or older.
Earlier this month, Finance of America Reverse announced its reverse second mortgage product, HomeSafe Second. Pre-retirees and retirees who do not want traditional home-equity or mortgage products are the target market for this product.
In the news release, Kristen Sieffert, President of Finance of America Reverse stated that according to the data from the U.S. Census Bureau, in 2021, there are more than 21 million homeowners aged 55 and up who had a mortgage. The company believes that many potential HomeSafe Second customers can come from these homeowners.
Although there is no monthly payment associated with the proprietary reverse second mortgage, the existing first mortgage payment, taxes, and insurance is still the responsibility of the borrower. The announcement said that since it is a non-recourse loan, the borrower together with their heirs will never have to pay for more than the home value.
The firm, which is based in San Diego, indicated that the maximum loan amount is $4 million, and there is no required minimum property value in order to qualify. There is no restriction on how the proceeds can be used, except for paying off the balance on the first mortgage.
There are initially six areas that can participate in the program: California, Colorado, Connecticut, Florida, South Carolina, and Texas.
A top-ranked reverse mortgage lender on ConsumerAffairs, Finance of America Reverse is one of the oldest reverse mortgage lenders in the country today.
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