"People want to make payments like a credit card, but there are no products out there that are really custom-designed for older homeowners to access the equity and make a payment that's comfortable for them, Peskin said in an interview with HousingWire's Reverse Mortgage Daily. This product allows them to make home improvements, pay off debt, help grandkids or whatever they want. With taxes and insurance rising, it helps cover that as well. It's a piece of the puzzle that was missing for us."
"EquitySelect targets retirees or soon-to-be retirees seeking to manage cash flow and remain in their homes without resorting to high-interest credit cards or interest-only, shorter term HELOCs. It may also serve borrowers who struggle to qualify for bank financing due to higher debt-to-income ratios. If you have a good asset to put a lien against, you're less concerned about cash flows. You obviously want cash flows, so we designed the loan to value based on the age of the borrower and their life expectancy."
The loan, EquitySelect, features a 40-year term with a seven-year draw period and a minimum draw requirement of 50% of the credit line or $75,000, whichever is higher. Payments are not recast for the life of the loan. The product targets retirees or soon-to-be retirees seeking cash-flow management and home retention without high-interest cards or short-term interest-only HELOCs. Loan-to-value is tailored to each borrower based on age and life expectancy, with older borrowers eligible for higher LTV. A full appraisal is required. The company distributes primarily through wholesale channels and is exploring bank and credit union partnerships.
Read at www.housingwire.com
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