Longbridge Financial launches a unique HELOC for Seniors® program

Core Insights - Longbridge Financial introduces the HELOC for Seniors®, an alternative for retirees aged 62 and older, providing easier access to cash and lighter payments compared to traditional HELOCs and reverse mortgages [1][3][17] Product Overview - The HELOC for Seniors® combines features of traditional HELOCs and reverse mortgages, specifically designed for retirees who are asset-rich but income-limited [3][11] - Unlike standard HELOCs, which require repayment of both principal and interest after a draw period, the HELOC for Seniors® allows for interest-only payments throughout the loan's life, provided property taxes, insurance, and maintenance are current [4][11] Payment Structure - Borrowers make interest-only payments for the entire duration of the loan, which helps maintain predictable monthly costs, beneficial for those on fixed incomes [4][17] - Each draw against the credit line locks in a fixed interest rate at the time of withdrawal, allowing for up to 10 years of borrowing with a maximum of 25 withdrawals [5][10] Draw Requirements - At closing, borrowers must draw 80% to 100% of the approved credit line, with credit lines ranging from $50,000 to $400,000 based on home value, credit, and equity [6][9] Approval Process - The application process is streamlined, with online applications and potential funding in as little as a week, enhancing accessibility for seniors [7][17] Comparison with Reverse Mortgages - The HELOC for Seniors® offers more flexible borrowing options and lower monthly payments compared to reverse mortgages, which provide no monthly payments but may be more suitable for those needing steady income [11][14] - Reverse mortgages allow for various payment structures, including monthly income, which may be more beneficial for some retirees [13][14] Considerations for Borrowers - Potential borrowers should evaluate borrowing costs, fees, and the implications of "maturity events" that trigger repayment, as these factors can significantly impact the affordability and suitability of the HELOC for Seniors® [15][16][18]