Hybrid reverse mortgage helps couple secure loan

Loan officer: Scott Baer, California Mortgage Advisors.

Property type: Single-family

residence.

Appraised value: $3.7 million.

Loan type: Cash.

Loan amount: $1.85 million.

Rate: 5.673 %.

Backstory: For many years, our clients had been planning for and looking forward to their retirement. As they eased into their 60s, they were interested in trading their traditional mortgage for a reverse mortgage.

They were disappointed to learn that they didn’t have enough equity for a reverse mortgage and would have needed to add substantial capital to close the loan.

I suggested my clients seek a hybrid reverse mortgage, which combines elements of a reverse mortgage with a forward or traditional mortgage.

The hybrid mortgage is a great option for clients who are at retirement age and don’t want to refinance into a long-term mortgage.

In a hybrid option, the borrower makes significantly reduced payments for 10 years. After the 10-year period, the payments are eliminated and the loan converts to a reverse mortgage with no balloon.

Hybrid mortgages are an option for homeowners age 60 and older with a mortgage balance over $100,000 and at least 10 years remaining on their current mortgage.

Minimum credit score and other criteria may apply.

I worked with the clients to close the hybrid loan in 30 days. The client now has a substantially lower payment and more flexibility to enjoy their retirement.

“The hybrid mortgage is a great option for clients who are at retirement age and don’t want to refinance into a long-term mortgage. In a hybrid option, the borrower makes significantly reduced payments for 10 years. After the 10-year period, the payments are eliminated and the loan converts to a reverse mortgage with no balloon.”