What is a senior product?

A senior product is a financial instrument that is designed to unlock or release equity from the home without payments, and with little or no qualifying.  There are three major types of senior products a reverse mortgage,  an equity share, and an appreciation advance

 

A reverse mortgage is available to seniors age 62 and over.  The most common reverse mortgage is a HECM, or Home Equity conversion mortgage.  This is a loan that is insured by the Fha, or Federal Housing administration.  The funds from a reverse mortgage can be taken in three ways, as a lump sum, a line of credit,  as a monthly payment  or as a combination of the three.  The reverse mortgage is a rising balance loan as all of the interest that is charged on a reverse mortgage is added to the balance as it is earned by the lender.  A reverse mortgage is a loan, and like any loan, it is just a lien on the property.  The lender does not own or control the property.  With a reverse mortgage you pledge the entire value o f the property, but you can never owe more that the property is worth.

 

An equity share agreement allows an investor to buy a percentage of the property and participate in the growth or loss of the property.  This program will allow you to get between 10 and 15%  of the property value as a cash payment up from in exchange for a participation of up to 35% of the property value This is whether the property value goes up or down.  There is no interest on an equity share program and there is no restriction on age!

 

The final senior program is an appreciation advance.  With an appreciation advance you are trading all or part of the future appreciation of the property for up front cash.  There is no repayment of the amount that is received, but the senior must be able to qualify for life insurance.  The insurance is paid for by the appreciation advance company .  Once again you can get between 10-15% of the current value of the property.  Two additional unique features of this program are that the appreciation company has no claim on the current value of the property and this is the only program that is not limited to owner occupied properties.