All Reverse Mortgage® is proud to announce our new Jumbo Reverse Mortgage Line of Credit (RMLOC). Like the Home Equity Conversion Mortgage (HECM), it is a non-recourse loan, meaning neither the borrowers nor their heirs shall have personal liability.
Our Jumbo RMLOC has no mortgage insurance, up front or annual renewal. The line of credit available grows at an annual rate of 5% on the unused portion of the line. This gives borrowers greater borrowing power on the line in future years when they still have available funds in the credit line.
Borrowers with high dollar value homes now have another choice in the Jumbo LOC that works extremely well, especially when they really liked the idea of getting a reverse mortgage but the thought of taking the full amount of the loan at inception was not appealing.
Line of Credit Features
- Access to line of credit with 5% growth rate.
- Loan amounts up to $4,000,000
- No upfront or monthly Mortgage Insurance Premium (MIP)
- Competitive adjustable rates. Interest rates change weekly with the publishing of the 3-month WSJ rates.
- Origination Fee: 2% of the first 200k; 1% of remaining value capped at $6,000.
- 5% cap over initial rate.
- Margin of 3.5% (or 3.75% if the borrower fails the Financial Assessment review).
- Borrowers can use loan proceeds to pay off debt at closing to income qualify.
- Non-recourse feature.
- Note: There are no term or tenure payment options allowed. The borrower may not bring additional funds to be added to the LOC.
- Unlike the HECM line of credit, borrowers can use loan proceeds to pay off debt at closing to income qualify.
Interest Rates & Margin
- A margin of 3.50% (or 3.75% if the borrower fails the Financial Assessment review)
- The rate is based on the three-month LIBOR index as published in the Wall Street Journal. Rates update weekly on Monday afternoons. ARM publishes the margins available to the borrower after the rates are updated.
- The initial interest rate is the three-month LIBOR index plus the borrower’s margin. Refer to All Reverse Mortgage® posted rates for the current margins available. Margins are subject to change.
- All Reverse Mortgage® does not offer rate locks currently, so margins are subject to change weekly.
- The floor (minimum) rate for the Proprietary Line of Credit is 4.99%.
- The rate caps are 1.00% per rate change period, and the rate ceiling (maximum) is 5.00% above the initial rate.
- Rates reset on the first day of each quarter after a full three months have passed since loan funding. (January 1, April 1, July 1, October 1)
Line of Credit Quote Example
In this example, the borrower has an available principal limit of $673,500
The borrower is required to take 25% upfront as a closed-end loan = $168,375
- Mortgage payoff = $150,000
- Closing costs = $11,023.95
- Cash Requested = $7,351
The remaining 75% is available as an open-ended Line of Credit = $505,125
Line of Credit Loan-to-Values
|3 Mo. Libor Rate||Current Rate 6%|
|Youngest Age||Loan-to-value %|
The Private Reverse Mortgage Line of Credit is currently only available in California but is expanding rapidly.
|Line of Credit||Jumbo Lump Sum||Second Mortgage||Payment Plan|
|Colorado||South Carolina||South Carolina|
|District of Columbia|
All Reverse Mortgage® is proudly committed to helping people get the most out of their home equity. The release of our Private Reverse Mortgage Line of Credit will help many of our clients unlock housing wealth, and leverage assets to meet their ongoing financial needs.
The Private Reverse Mortgage is specifically designed for borrowers who own property that allows them to borrow more than the FHA maximum HECM lending limit of $679,650. It is also designed for those with other situations that would not qualify under the HECM program.