Financial Freedom's Cash Account
Financial Freedom’s Cash Account reverse mortgage program provides a valuable alternative for some homeowners looking to tap into their equity. However, its benefit is generally limited to individuals whose home’s value is higher than FHA’s Home Equity Conversion Mortgage (HECM) will allow. Some consider this a "jumbo" reverse mortgage.
Cash Account Versus HECM
Unlike HECM, Cash Account has no limits on the size of the loan. The drawback is that the program restricts the loan to value to a lower percentage than FHA allows. To illustrate this point, compare the options available to an 80 year old in Boone County Missouri under the two plans.
As you can see, the individual with the $150,000 home could access more money through FHA’s HECM because the loan to value limit is higher. Meanwhile, the homeowner with $900,000 in equity would pull out more through Cash Account reverse mortgage because there home is worth far more than the $200,000 that HECM’s are limited to in Boone County, Missouri.
|
Home Value (free and clear) |
Amount Available Through Cash Account |
Amount Available Through HECM |
|---|---|---|
| $150,000 | $71,000 | $104,000 |
| $900,000 | $442,000 | $142,000 |
As you can see, the individual with the $150,000 home could access more money through FHA’s HECM because the loan to value limit is higher. Meanwhile, the homeowner with $900,000 in equity would pull out more through Cash Account reverse mortgage because there home is worth far more than the $200,000 that HECM’s are limited to in Boone County, Missouri.
Equity Choice Feature
Another consideration is a unique option offered by the Cash Account called the Equity Choice Feature. Through Equity Choice, the homeowners can choose to limit the loan to just a portion of the home’s value (from a minimum of 10% to a maximum 50%). For example, the owner of a $2 million home could choose to only take out a reverse mortgage based on $1 million, protecting the remainder for their heirs.
Interest Rate and Terms
The interest rate on Financial Freedom’s Cash Account is comparable to HECM and disbursement options offered are similar. As with all reverse mortgage programs, the homeowner does not make monthly payments. The loan is due when the borrower passes away or is no longer occupies the home. It is a non-recourse loan meaning the homeowner and their heirs will not be liable if the loans balance grows to an amount that is more than house is worth.
To compare your reverse mortgage options, including HECM, Cash Account, and more, use Grindstone United’s Best Deal Comparison tool or call 866-508-HECM.
To compare your reverse mortgage options, including HECM, Cash Account, and more, use Grindstone United’s Best Deal Comparison tool or call 866-508-HECM.