Say Hello to HELO

Access What You Own

The purpose of a reverse mortgage is to access home equity. Whether you use your home equity to handle immediate bills or add another layer to your retirement strategy, the reverse mortgage can enable you to reach your retirement goals. If you want the most out of your home, the Home Equity Loan Optimizer (HELO) offers a new way to access 100% of your available proceeds to use however you wish.

HELO Highlights

For years, some seniors have been excluded from the government’s reverse mortgage program. Now, HELO will offer many of them another chance to access their home equity. The Home Equity Loan Optimizer does not have as many housing restrictions and lending limits as the FHA reverse mortgage, making it an ideal solution for many seniors nationwide. Unique features include:

  • No property restrictions. High-value homes, condominiums, homes with solar panels, and other residential properties which do not qualify for an FHA reverse mortgage could still qualify.
  • 100% of all HELO proceeds are disbursed at closing. This means that you can access 100% of your funds as soon as you close your loan.
  • Higher lending limits mean that you could get more money at lower costs. In fact, some clients may be able to receive up to $4 million.
  • Consolidating debt is possible during the mortgage process. This may help you qualify.
  • HELO is still a non-recourse loan, meaning that no matter how much your loan’s balance increases, you will never owe more than the value of your home.
  • Because HELO is a fixed rate loan, you can calculate how your loan balance will change over time.

How HELO Works

Although the HELO offers many unique benefits in comparison to a standard FHA reverse mortgage, it still functions in a similar way:

  • You will remain the owner of your home.
  • You can make payments if you wish, but there are no required monthly payments.
  • If you decide not to make monthly mortgage payments, interest for those months will be added to the loan balance.
  • You must still maintain the property, pay homeowners insurance, and property taxes to avoid foreclosure.
  • The reverse mortgage will come due if you vacate the home, sell the home, or pass away.

The HELO in Action

HELO Scenario Calculation Graph

Meet Tim and Ashley, two 68-year-old homeowners who purchased a seaside cottage in the Bay Area years ago. With its solar panels and high value, their home wasn’t a candidate for a FHA reverse mortgage. But, the situation has changed over the years. Now, their little bungalow has ballooned in value to reach $1,800,000. Based on their age and other factors, Tim and Ashley learn that they are eligible to receive $648,000 if they get a HELO with a fixed rate of 6.625%.

After paying off closing costs and an existing mortgage of $80,500, they receive $564,000 in funds to use as they wish. From the moment of closing, they gain access to a larger portion of their home equity than they could with a standard FHA reverse mortgage. Plus, they are able to walk away with over half a million dollars of their home equity even after paying off their existing mortgage and closing costs. Tim and Ashley’s story demonstrates the remarkable potential of HELO; nowadays, accessing a greater portion of your home’s equity is easier than ever.

*Sample hypothetical scenario is for our HELO reverse mortgage and is based on the 10-Year LIBOR swap index as of 9-7-2018. The index can change at any time. APR is 6.326%. Results may vary.