It’s important to note one of the main differences between a federally insured HECM reverse mortgage line of credit and HELOC during the COVID-19 pandemic is a HECM line of credit can not be closed or frozen for future usage due to COVID-19 economic conditions or due to a drop in home values.
As of this writing, July 14, 2020, Wells Fargo, and Chase Bank, were not accepting any new HELOC applications for any borrower(s) regardless of age, other lenders may follow suit. The FHA HECM line of credit program is accepting new applications nationwide. If economic conditions deteriorate HELOC lines of credit can be closed without notice to the borrower, as in 2008.
Many people are facing a cash crunch during this pandemic making it vital to have access to emergency funds when they need it. The HECM line of credit provides that lifeline and is a more dependable, safer way for borrowers 62 and older to access funds when needed without having to worry if it’s going to be available or not.
The HECM line of credit is no longer just for retired folks. Some seniors who were recently gainfully employed have been laid off or had their hours cut due to COVID-19 unexpectedly. Borrowers who have HELOC’s and HECM line of credits are also taking advances from their lines to help their children’s families affected by COVID-19 which places more urgency on these funds to be accessible without limitations.
There are non-HECM line of credit programs out there now that go up to a $4 million loan amount with low lender fees. I don’t know what you’ve heard about reverse mortgages, but the most recent guideline changes have made the product safer than before making reverse mortgages deserve a second look.
If you have any questions or concerns on how a federally insured HECM reverse mortgage line of credit or a non-HECM reverse mortgage line of credit works, please call me or send me a message to my email address listed below.
I hope you and your family and friends are doing well and thriving during these difficult times.
Be well,
KW
Kevin Walton, NMLS #245923 // C2 Financial Corporation NMLS #135622
Kevin Walton DRE #, 01453270//C2 Financial Corporation DRE#, 01821025
Corporate: 858-312-4900 // Mobile: 805-276-1942
[email protected] www.californiareversemortgage.biz