| Author |
Previous Topic | Next Topic |
|
gdjoe20
330 Posts |
 Posted - 08/05/2008 : 11:23:11 AM
|
| Why is it that on the Fixed Rate option, the borrower must take out the maximum avalible lump sum. I have a borrower that wants a fixed rate reverse, Qualifies for 97K but only wants 60K. Am I just having trouble with the JB Nutter Software getting this done, or is this an Industry Wide rule. Sorry if its a dumb question, but better to ask a Dumb question, than give a dumb answer. Havent had any borrowers that wanted the fixed rate until now. |
|
MisterVA
6634 Posts |
Posted - 08/05/2008 : 11:35:01 AM
|
| That pretty much sums it up. If they want the line of credit, they have to go ARM. |
|
|
gdjoe20
330 Posts |
Posted - 08/05/2008 : 12:25:25 PM
|
quote:
Originally posted by MisterVA
That pretty much sums it up. If they want the line of credit, they have to go ARM.
Ok. How can i best explain why they cant only take 60K, but need to take the full 97K. I guess because its a HUD rule, and this is the way they set up the program? |
|
|
WorldWideWayne
2442 Posts |
Posted - 08/05/2008 : 12:29:15 PM
|
Like you just did.
Mr/Mrs Customer it's this way because it's a guideline for the fixed rate program. |
|
|
gdjoe20
330 Posts |
Posted - 08/05/2008 : 12:35:18 PM
|
| Thanks to all! Wayne are you still calling seniors? I have been using a telemarketer to cold call seniors to see if they would like some RM info, and I seeing if it is worth continuing. Still 50/50 if I will be. |
|
|
WorldWideWayne
2442 Posts |
Posted - 08/05/2008 : 12:45:04 PM
|
quote:
Originally posted by gdjoe20
Thanks to all! Wayne are you still calling seniors? I have been using a telemarketer to cold call seniors to see if they would like some RM info, and I seeing if it is worth continuing. Still 50/50 if I will be.
You have mail. |
|
|
MisterVA
6634 Posts |
Posted - 08/05/2008 : 1:07:35 PM
|
| They can always pay back the 37k and interest will accumulate on the 60k, but they cannot access that 37k again. |
|
|
kmikkola
799 Posts |
Posted - 08/05/2008 : 1:40:19 PM
|
quote:
Originally posted by WorldWideWayne
quote:
Originally posted by gdjoe20
Thanks to all! Wayne are you still calling seniors? I have been using a telemarketer to cold call seniors to see if they would like some RM info, and I seeing if it is worth continuing. Still 50/50 if I will be.
You have mail.
Very secretive answer Wayne... |
|
|
WorldWideWayne
2442 Posts |
Posted - 08/05/2008 : 1:47:14 PM
|
| I did not want to hijack the thread with personal chatter KENT. |
|
|
ownerop
389 Posts |
Posted - 08/05/2008 : 2:28:54 PM
|
| The fixed rate product is garbage; client gets least amount of money and it's a higher rate currently, also you can't get credit line that really works like a savings account that can offset the negative amortization on the reverse mortgage. This is how you should sell it, once the client understands how they work, they will never chose the fixed option. |
|
|
StayInHomeGuy
281 Posts |
Posted - 08/05/2008 : 2:42:52 PM
|
quote:
Originally posted by ownerop
The fixed rate product is garbage; client gets least amount of money and it's a higher rate currently, also you can't get credit line that really works like a savings account that can offset the negative amortization on the reverse mortgage. This is how you should sell it, once the client understands how they work, they will never chose the fixed option.
Ahhh I wish this were true... the ARm is most definitely flexible but I have done plenty of fixed rate HECMS as well, when you have a client who wants all of his cash at close and likes a fixed rate it's a perfect fit. Plus, there is no guessing as to how the loan may ammortize. |
|
|
downtime
228 Posts |
Posted - 08/05/2008 : 2:54:36 PM
|
Interesting .
The guy MUST take out the maximum ? Fine. Do so, they chunk the overage right back down on the loan.
|
|
|
ownerop
389 Posts |
Posted - 08/05/2008 : 3:26:43 PM
|
quote:
Originally posted by downtime
Interesting .
The guy MUST take out the maximum ? Fine. Do so, they chunk the overage right back down on the loan.
That's a good point, never thought of that. |
|
|
ownerop
389 Posts |
Posted - 08/05/2008 : 3:28:03 PM
|
quote:
Originally posted by StayInHomeGuy
quote:
Originally posted by ownerop
The fixed rate product is garbage; client gets least amount of money and it's a higher rate currently, also you can't get credit line that really works like a savings account that can offset the negative amortization on the reverse mortgage. This is how you should sell it, once the client understands how they work, they will never chose the fixed option.
Ahhh I wish this were true... the ARm is most definitely flexible but I have done plenty of fixed rate HECMS as well, when you have a client who wants all of his cash at close and likes a fixed rate it's a perfect fit. Plus, there is no guessing as to how the loan may ammortize.
If the client is well informed they would never take the fixed option. The credit line will offset any negative amortization if they don't need all the cash. |
|
|
rainmand
3837 Posts |
Posted - 08/06/2008 : 07:42:47 AM
|
I forget which Lender it is ... I think World Alliance, but one of the Lenders will allow the homeowner to receive a credit line or monthly payments with the fixed HECM, but the interest rate is increased 10 points when they select that option. Chances are very good that nobody has ever selected those options with their fixed program.
The fixed program is more of a marketing tool for originators (and it's not a HUD program ... it's not sold to Fannie Mae). Most seniors are only comfortable with fixed rate mortgages and when they initially start looking for quotes from a lender, want to be quoted a fixed rate program. So the originator quotes them the fixed program, reviews how it works with the homeowner, then quotes the variable program and reviews how it works. After the homeowner understands the differences, most select the variable program. The fixed program creates an environment that enables me to start a relationship with the homeowner. |
|
|
ownerop
389 Posts |
Posted - 08/06/2008 : 11:40:50 AM
|
quote:
Originally posted by rainmand
I forget which Lender it is ... I think World Alliance, but one of the Lenders will allow the homeowner to receive a credit line or monthly payments with the fixed HECM, but the interest rate is increased 10 points when they select that option. Chances are very good that nobody has ever selected those options with their fixed program.
The fixed program is more of a marketing tool for originators (and it's not a HUD program ... it's not sold to Fannie Mae). Most seniors are only comfortable with fixed rate mortgages and when they initially start looking for quotes from a lender, want to be quoted a fixed rate program. So the originator quotes them the fixed program, reviews how it works with the homeowner, then quotes the variable program and reviews how it works. After the homeowner understands the differences, most select the variable program. The fixed program creates an environment that enables me to start a relationship with the homeowner.
Exactly right, you make a good point. It's a selling gimick only. |
|
|
| |
Previous Topic | Next Topic |
|
Search for: 
