The originators of reverse mortgages have always lauded the advantages of reverse mortgage options for a few prospects relative to HELOCs or home equity lines of credit. However, the latest changes in the home equity lending environment brought this differentiation back to the fore, and a few originators are getting higher numbers of inquiries because of people who want to get a HELOC but are unable to qualify.
The merits of HELOC and HECM were easily compared before when credit were easily obtained and the interest rates were low. Now, things have changed and the situation has made the differentiation a lot more favourable and the discussion has been made far easier.
J.P Morgan Chase Bank announced recently that it would no longer accept applications for HELOC because of the coronavirus outbreak, which presents a major advantage for HECMs. Another bank, Wells Fargo, also did the same thing.
The product offerings and the lending standards have been adjusted by other lenders. With a few potential HELOC borrowers not qualifying or perhaps facing fewer options has led to more discussions about reverse mortgage.
Experts say that several banks have been referring clients who are seeking a HELOC but are unable to help to their competitors. First they ask if their aging clients qualify for HECM and in most cases, these clients are sitting in their office. There is a growing urgency to take out a loan because of the increasing number of job losses and the ongoing market turmoil, which made applicants unable to wait a few weeks.
Much of the business are coming from referrals and because of that, there are more questions about the reverse mortgage qualification guidelines.
The No Freeze Benefit
Emphasizing the benefits of reverse mortgages during these uncertain times, not to mention the fact that a lender can’t cancel or freeze the reverse mortgage, which is possible with a HELOC. This has become a primary selling point for reverse mortgages.
This crucial advantage is being highlighted to both financial planners and potential borrowers because it could be an important protection during these uncertain times. A lot of people are looking for security as they plan for their retirement and reverse mortgage can be a crucial part of that.
Existing and potential HELOC borrowers are asking more questions about reverse mortgage loans. A lot of seniors are worried that they may no longer be able to access their line of credits at a time when they need it the most. That’s why many of them are considering this option.
A lot of borrowers have encountered a lot of issues with frozen line of credit and the no freeze benefit is an attractive feature of a reverse mortgage Myrtle Beach.
Call Reverse Mortgage Specialist if you are looking for more information about reverse mortgage.
Reverse Mortgage Specialist
1293 Professional Drive, Suite 204
Myrtle Beach, SC 29577