The Department of Housing and Urban Development (HUD) officially released a new low cost reverse mortgage product for consumers on Tuesday.
Designed to address one of the biggest complaints of reverse mortgages, the HECM Saver offers borrowers less money at a lower cost.
“FHA designed HECM Saver as a second initial mortgage insurance premium (MIP) option for the purpose of lowering upfront loan closing costs, for mortgagors who want to borrow a smaller amount than what would be available with a HECM Standard,” said David Stevens, Assistant Secretary for HUD.
According to HUD, the HECM Saver has a 0.01% upfront mortgage insurance premium and 1.25% annual MIP. Much lower than the 2% upfront MIP and 1.25% annual MIP charged to HECM Standard borrowers.
The product is available for all transaction types and both a fixed rate and LIBOR or CMT based loan. To view the principal limit factors, see here.
