This week I think it is appropriate to send an explanation of the new HECM product for a second week in a row.
Jack Guttentag, The Mortgage Professor, is a true expert on reverse mortgages and presents a clear and objective explanation of the new program and its effects.
Having said that, let me point out that there is a major error in the article linked below. The new Principal Limits will REDUCE the amount available to most borrowers, not increase them. Guttentag sent out an apology for the error. The one exception and what Guttentag may have been confused about is that the lower cash amount available at the 0.5% Government insurance Premium is actually higher than that available under the old Saver Program.
It is also important to note that for HECM purchase money there is NO 60% FIRST YEAR LIMIT on disbursements. So for you Realtors and Builders, please understand that 100% of the principal limit is available immediately toward the purchase.
The best way to understand all of this is to call me. I will also be happy to come to your organization for a Lunch and Learn.
Here is The Mortgage Professor’s article from 10/24: