NU Online News Service, Sept. 25, 2003, 3:16 p.m. EDT – Financial Freedom Senior Funding Corp., Irvine, Calif., has introduced a no-fee loan for the reverse mortgage industry.
The product will help consumers whose homes are valued at more than $450,000 get more money at a lower cost, Financial Freedom says.
The loans will be available from community banks and other financial institutions.
Financial Freedom, a subsidiary of Lehman Brothers, New York, says it has reduced loan costs by eliminating up-front origination fees and capping third-party closing costs. But borrowers are required to draw 75% of their maximum available benefit at loan closing.
Reverse mortgages give homeowners over age 62 the ability to convert part of the equity in their homes into tax-free income. The borrowers get to stay in their homes as long as they make their property tax and insurance payments, but they are not able to pass their homes on to their children or other heirs.