New
Open-End Hybrid HECM
Are you looking to replace
the Freedom of your Fixed Rate HECMs? Introducing the Open-End HYBRID HECM
The Hybrid HECM is an FHA-insured Open-End
Reverse Mortgage that gives borrowers the ability to access 100% of the
principal limit within guidelines with all payment plan options available, with
an interest rate that is fixed for the first year and adjusts annually
thereafter.
The interest rate uses the 1-year LIBOR index plus a margin similar to the monthly HECM with the principal limit calculations being calculated the same as the monthly product. This rate is capped at the maximum of 5% APR above the initial rate over the life of the loan. This means the Hybrid HECM with a 2.5% APR initial rate could only raise to a maximum interest rate of 7.5% APR. Annual rate increases are further limited by a 2% APR cap, also protecting borrowers from interest rate volatility.
The HECM Hybrid Reverse Mortgage gives brokers the flexibility to provide borrowers with closing cost credits by having control over the originates fee and back-end premium.
KEY PRODUCT FEATURES
ü Product is Open-End financing (Rare
Niche)
ü Product allows for 100% principal
limit utilization within guidelines
ü Low Initial Interest rate locked
for the first year
ü Maximum interest rate increase is
2% APR annually
ü Maximum life time interest rate
increase is only 5% APR
ü Fully compliant, FHA-insured HECM
product
ü If the principal balance is paid
down the line of credit is retained for future use
