Proprietary Reverse Mortgage
What Is a Proprietary Reverse Mortgage?
These loans are also commonly referred to as private reverse mortgages or jumbo reverse mortgages.
One of the primary reasons homeowners consider this type of reverse mortgage is the potential to access a larger amount of equity when the property value is higher than the limits applicable to an FHA HECM.
Who Can Benefit From a Proprietary Reverse Mortgage?
How Does a Proprietary Reverse Mortgage Work?
Once approved, the loan proceeds are provided according to the selected loan structure.
The homeowner generally remains responsible for property taxes, homeowners insurance, maintenance, and other applicable property charges. The home must also continue to meet the occupancy requirements of the loan.
Step 1
Check Eligibility
Step 2
Step 3
Step 4
Step 5
Proprietary Reverse Mortgage Loan Options
Fixed Rate Reverse Mortgage
Adjustable Rate Reverse Mortgage
The available line of credit can provide greater flexibility because funds may be accessed as needed rather than taking the entire amount at closing.
Proprietary Reverse Mortgage vs FHA HECM
A proprietary reverse mortgage may offer advantages for homeowners with higher value properties or borrowers who need a loan structure that differs from a traditional HECM.
A HECM may provide features and protections that are not available through every proprietary program.
The right option depends on the homeowner’s age, property value, equity position, financial goals, and eligibility.
Proprietary Reverse Mortgage Eligibility
Minimum Age
When multiple borrowers are involved, the youngest borrower’s age can affect the amount available because life expectancy is considered when determining the loan amount.
Non Borrowing Spouse
How Can You Receive the Reverse Mortgage Funds?
A fixed rate program may provide the proceeds as a lump sum.
Some adjustable rate programs may offer a reverse mortgage line of credit, giving homeowners access to funds over time.
A line of credit can provide flexibility for homeowners who do not need all available proceeds immediately.
Proprietary Reverse Mortgage Closing Costs
However, other expenses can still apply, including appraisal fees, title charges, closing costs, lender fees, and other transaction expenses.
Homeowners should compare the total cost of the loan, including the interest rate and applicable fees, rather than evaluating the loan based on closing costs alone.
