What You Need to Know To Borrow
Reverse mortgages allow mature homeowners the unique opportunity to tap into the equity they have in their homes. But how does a potential borrower go about finding a reputable lender?
The best way is to shop locally. It’s not unlike getting the initial home mortgage. You’ll find reverse mortgage lenders of all kinds throughout Hawaii, just like anywhere else. Lenders may be retail banks, mortgage brokers, even insurance companies often provide mortgage and reverse mortgage products.
FHA Loan Limits and HUD Reverse Mortgages
The federally insured Home Equity Conversion Mortgage (HECM) is the hands-down most popular type of reverse mortgage across the board. Borrowers must have homes valued within FHA mortgage limits to squeeze all the equity they can from their homes. Because home values are high in Hawaii the FHA limits are also set higher than most other states, beneficial for both high-end and low-end homeowners.
If you are looking for a HUD HECM, shop for a lender on the HUD-approved lender list.
Hawaii Safeguards Seniors from Reverse Mortgage Scams
In 2007 the State of Hawaii ramped up efforts to safeguard real estate investments for the growing senior citizen population. Fines have been raised to punish scammers that prey specifically on the elderly, including the growing number of reverse mortgage scams.*
Reverse Mortgage Providers in Hawaii
Use the list below as a jumping off point. It summarizes a few of the various lenders available to homeowners in Hawaii. Your lender can help you decide if a reverse mortgage product is right for your financial goals.
Central Pacific HomeLoans
This company is exclusive to Hawaii and specializes in all types of mortgages including FHA, second mortgages, home equity loans and reverse mortgages. Borrowers may choose from three popular types of reverse mortgage products. The federally insured Home Equity Conversion Mortgage (HECM) is a HUD sponsored product and accounts for well over 90% of all reverse mortgages in the country. But there are limits to this program. Fannie Mae Home Keeper reverse mortgage is designed with similar requirements to the HECM, but does allow a slightly higher lending limit. For Hawaii homeowners with very high property values a Financial Freedom Cash Account reverse mortgage imposes no limits.
Reverse Mortgage Specialists of Hawaii
This FHA-approved lending company is especially active in education, with the understanding that the reverse mortgage business is complex and that seniors must understand what they are doing when closing day rolls around. Also, for the significant population of Japanese in Hawaii, this particular lender offers its website in Japanese as well as a number of its seminars. RMS offers the federally funded Home Equity Conversion Mortgage from HUD and the FHA.
The Mortgage House, Inc.
This company practices green business. It offers a wide range of mortgage products including home equity lines of credit and energy efficient mortgages. Among its reverse mortgage products are the HUD federally insured Home Equity Conversion Mortgage (HECM), Fannie Mae Home Keeper and the Financial Freedom Cash Account, a jumbo mortgage with no maximum limit.
*Linda Chiem, State cracks down on fraudsters who prey on Hawaii’s elderly, July 6, 2007.