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Credit Union Rolls Out Easy-To-Use Reverse Mortgage
By James Comtois
RALEIGH, NC -As a means to help senior members utilize the wealth in their homes in the best manner, State Employees' Credit Union, a local non-profit financial cooperative, has unveiled what it terms a consumer-friendly reverse mortgage.
The SECU loan offers a fixed, stable rate of interest; a simple interest accrual method; a low origination fee of 1%; no mortgage insurance and no monthly service fees.
In comparison, the most popular reverse mortgage product, the Federal Housing Administration's Home Equity Conversion Mortgage, has a mortgage insurance premium built in.
"SECU investigated the reverse mortgage marketplace and we saw numerous opportunities to provide this important product to our members, reducing the typical costs being assessed," said Phil Greer, senior vice president of loan administration. "Through reduced fees, a fixed rate of interest and a simple interest accrual method, we will provide the member with an enhanced use of their equity."
Mr. Greer added that SECU hopes this will result in more funds being made available to the member in order to assist with their day-to-day living expenses.
"Seniors in the market for this type of product can be extremely vulnerable. There are media ads promising 'too good to be true' products that are ultimately not in the best interest of the borrower.
"Consumer education is crucial in making sure the older population does not fall victim to what could become the next frontier for mortgage scams. We are pleased SECU has developed a consumer-friendly product to assist North Carolina's retired state employees," said Ed Regan, executive director of the North Carolina Retired Governmental Employees' Association.
SECU sought assistance from various senior-affiliated organizations in designing a beneficial reverse mortgage product. To provide additional guidance and financial education on reverse mortgages, SECU also published a booklet for members to learn about the product. The booklet is available via the SECU website at http://www.ncsecu.org.
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