Liberty Home Equity Solutions Reverse Mortgage Review
The Best Reverse Mortgage Company
Liberty Home Equity Solutions offers seniors two types of federally insured reverse mortgage products. Individuals who are at least 62 years old and have a minimum of 50% equity invested in their homes may take advantage of a home equity conversion mortgage or an HECM for Purchase.
Pros:
- Guarantees that loans will close within 60 days or less from the date that the loan application and HUD Counseling Certificate is received, or else a $500 credit toward closing costs is issued.
- Provides an easy-to-use online calculator to evaluate reverse mortgage eligibility
- Does not charge up-front lender fees
- Trustworthy and reliable service since 2004
Cons:
- Pay up to $6,000 in origination fees with traditional HECM reverse mortgage
Overview of Liberty Home Equity Solutions Reverse Mortgages
Since 2013, Liberty Home Equity Solutions has focused solely on HECM and HECM for Purchase products. Their traditional reverse loan programs are approved by the Department of Urban Housing and regulated and insured by the Federal Housing Authority. They offer seniors the choices they need to help stretch their retirement income.
- Borrowers may opt for an adjustable or fixed rate HECM, depending on whether they receive monthly payments or a lump sum payout.
- The HECM for Purchase allows seniors to move to another residence that better meets their needs by using the proceeds from their current home to fund the downpayment on their new property.
What Fees Does Liberty Home Equity Solutions Charge?
As a federally regulated loan originator and servicer, Liberty Home Equity Solutions’ fees fall within the standardized range considered affordable for seniors.
- Upfront Costs
- HUD required loan counseling: $125-$175
- Home appraisal: $400-$500
- Closing fees: $1,000-$2,000
- Loan origination: $0-$6,000
- Initial mortgage insurance payment: 2% of the home’s appraised value
- Ongoing Costs
- Interest: on the outstanding principal that compounds annually
- Mortgage insurance: 0.5% of the outstanding balance up to the contract’s 5-year point or 78% of the property value is reached, whichever occurs first
- Administrative fees: $25-$35 per month
Full Review of Liberty Home Equity Solutions Reverse Mortgage Features
The different reverse mortgage programs that Liberty Home Equity Solutions offers are designed to meet specific needs; however, they all share certain eligibility criteria and loan and repayment requirements.
Eligibility
The top three reverse mortgage loan requirements are age, home equity and residency. Borrowers must be 62 or older, have invested at least 50% equity in the property and live in the home as a principal residence.
HUD also has distinct property types and age parameters to qualify for a reverse mortgage. Acceptable residences include single-family homes, two- to four-unit properties, manufactured homes, condominiums or townhomes. Structures must have been built on or after June 15, 1976.
In addition, HUD stipulates that the home must be in sound structural condition. Seniors with homes that need updating or minor repairs and maintenance may be able to apply and use the loan to complete the necessary work.
Length of Loan
Reverse mortgage loans remain intact as long as the homeowner continues paying the taxes, insurance, and any HOA fees and stays current with ongoing maintenance and residency requirements.
Repayment Requirements
Seniors may opt for one of Liberty Home Equity Solutions’ traditional HECM or HECM for Purchase products. Each provides borrowers a financial solution without the burden of a monthly loan payment. The balance is paid from the sale of the property when the last borrower dies or moves.
Depending on the loan’s specifics, accommodations may be made for non-borrowing surviving spouses to remain in the home. Heirs have the option to repay the loan or deed the property back to the lender.
Liberty Home Equity Solutions HECM
Seniors may tap into the cash they need to supplement their income through Liberty Home Equity Solutions’ HECM. The home equity conversion mortgage allows seniors to access the equity they’ve invested while remaining in their homes.
Payout Options
HECM options include a lump-sum payout, fixed monthly payments or a line-of-credit account.
Federally Insured Mortgage Loan
The FHA strictly regulates and insures HECM loans.
Interest Rates
Receiving the loan in a lump sum disbursement allows borrowers to lock in a fixed interest rate throughout the loan’s term. Other HECM disbursement options are offered with variable rates. The overall fees include a base interest rate and an added lender’s margin of 1% to 3%.
Maximum Loans
A borrower’s loan cap depends on the loan’s interest rate, your home’s appraised value up to an FHA maximum of $970,800, your equity and the age of the youngest borrower. Reverse mortgages average between 40% and 60% of the property’s value.
Liberty Home Equity Solutions HECM for Purchase
Seniors may need the security of living closer to family. They may have to downsize to a home that meets their needs. A Home Equity Conversion Mortgage for Purchase program helps secure the new home’s down payment without tying up cash.
Eligibility
The borrower’s current property needs to have enough equity to cover the new home’s substantial downpayment.
Payout Options
The proceeds from the sale of the senior’s previous home convert to a one-time downpayment payout for the new home. A required down payment averages between 45% and 62% of the purchase price.
Federally Insured Mortgage Loan
HECM for Purchase loans are FHA regulated and insured.
Maximum Loan
The maximum loan or claim amount the FHA will insure is $970,800.
Who Should Consider a Liberty Home Equity Solutions Reverse Mortgage?
Seniors Who Need a Home that Better Accommodates Their Changing Lifestyle
Seniors may realize that their current home is too large or outdated, has too many stairs or is too far away from family to be practical. An HECM for Purchase provides the option to tap into equity and purchase an updated low-maintenance home that settles them close enough to the necessary conveniences.
Seniors Who Need To Supplement Their Retirement Income
Individuals who encounter unexpected home repairs or medical expenses can benefit from the supplemental income an HECM provides.
What Are People Saying About Liberty Home Equity Solutions Reverse Mortgages?
Liberty Home Equity Solutions has an average rating of 4.3 out of 5 on ConsumerAffairs.com. The consensus from 207 reviews is that, as a direct lender available in 49 states, the company’s streamlined process and responsive customer service professionals create a positive experience.
FAQs
What Is the Difference Between a Home Equity Loan and a Reverse Mortgage?
A HELOC and HECM are considerably different on a number of levels, including:
• Loan qualifications: A lender approves a HELOC loan based on the borrower’s creditworthiness, taking into account an applicant’s employment, credit score and financial obligations. With an HECM, the borrower’s age, home equity and residency are the key requirements to qualify for a loan.
• Repayment: A borrower with a HELOC repays the loan monthly based on the amount withdrawn and the interest rate. A senior isn’t required to make monthly payments on an HECM.
• Closing costs: HELOC closing costs typically range between 2% and 5% of the loan. HECM closing costs can run as high as $6,000.
Click here for our full answer to this question.
Do You Still Own Your Home With a Reverse Mortgage?
Homeowners retain the ownership of their property with a reverse mortgage until the last surviving borrower passes, fails to pay the taxes, insurance and any HOA fees or lets the property fall into disrepair. A homeowner who lives elsewhere for more than a year is also subject to foreclosure. Click here for our full answer to this question.
Will a Reverse Mortgage Affect My Pension?
How the loan is dispersed could affect need-based income and programs, including Supplemental Security Income and Medicaid. A reverse mortgage won’t affect the Social Security payments you receive based on career earnings. By the same token, reverse mortgage proceeds won’t impact a privately funded pension earned through an employer. Click here for our full answer to this question.
How Much Money Do You Get From a Reverse Mortgage?
While the FHA strictly regulates reverse mortgage guidelines, there are a number of factors that affect your qualifying loan amount. Current interest rates, the amount of equity invested and the youngest borrower’s age contribute to the equation. That said, payouts typically range between 40% and 60% of the home’s value. Click here for our full answer to this question.
What Happens With a Reverse Mortgage if the Owner of the Home Dies?
While every situation is different, the general considerations and course of events with a reverse mortgage after the death of an owner include:
• A co-borrowing spouse can continue to live in the home and adhere to the loan’s conditions.
• A non-borrowing spouse who meets specific criteria could remain in the home.
• Heirs may have the option to deed the property back to the lender. If they have the means, they could choose to pay off the reverse mortgage and keep or sell the property.
Click here for our full answer to this question.